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The information contained in the Website is NOT FOR RETAIL CLIENTS – The information contained in the Website is solely intended for professional investors, defined as investors which (1) qualify as professional clients within the meaning of the Markets in Financial Instruments Directive (MiFID), (2) have requested to be treated as professional clients within the meaning of the MiFID or (3) are authorised to receive such information under any other applicable laws. The value of the investments may fluctuate. Past performance is no guarantee of future results. Investors may not get back the amount originally invested. Neither Robeco Institutional Asset Management B.V. nor any of its affiliates guarantees the performance or the future returns of any investments. If the currency in which the past performance is displayed differs from the currency of the country in which you reside, then you should be aware that due to exchange rate fluctuations the performance shown may increase or decrease if converted into your local currency.

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Thematic investing

Magnificent Seven

The Magnificent Seven refers to the seven largest tech companies on the S&P 500 and MSCI World Indices by market capitalization. In December 2024, each exceeded USD 1 trillion in value, collectively representing one-third of either index's capitalization. The term was coined by Bank of America analyst Michael Hartnett in 2023 in a nod to the seven gunslingers of the eponymous 1960’s Western movie.


The Magnificent Seven by sector and market value

The Magnificent Seven by sector and market value

Source: Robeco, Bloomberg.

The market caps of Apple, Nvidia and Microsoft are all larger than the GDP of France. Due to their size, the Magnificent Seven have regularly accounted for more than 90% of the returns of the S&P 500, and were half the index’s 22% gain in 2024. This has led some commentators to create an alternative ‘S&P 493 Index’ stripping out the Magnificent Seven, to make performance comparisons of the majority of ‘normal’ index constituents more meaningful.

One facet of the grouping is that they are all US tech companies, and are not exclusively the seven largest companies in the world. The Saudi Aramco oil giant is not included, even though in December 2024 it was the world’s sixth largest company with a market cap of USD 1.8 trillion. Two other companies – the investment group Berkshire Hathaway and Taiwan Semiconductor – have both achieved market caps above USD 1 trillion, but are also not included.

Nvidia’s share price has risen tenfold in under two years

Nvidia’s share price has risen tenfold in under two years

Source: Robeco, Bloomberg

The rise of tech giants and their journey to dominance

Of the seven companies, only Microsoft and Apple date back to the 1970s, though neither achieved prominence until the 1980s with the launch of personal computing. Amazon and Alphabet (then as Google) date to the start of the internet boom in the mid-1990s, while Facebook was not launched until 2004.

Tesla has made electric vehicles for the mass market from 2003. Nvidia is the outlier, as it was founded in 1993 but did not achieve mega-cap status until it started making the chips that power artificial intelligence from the 2010s, trebling its market cap in 2024 alone.

Microsoft became the first company to be worth USD 500 billion in 1999 and then Apple became the first to be worth more than USD 1 trillion in 2018. Microsoft founder Bill Gates became the world’s richest man in the 1990s, a title now periodically held by Tesla founder Elon Musk and Amazon founder Jeff Bezos.

Footnote

1 Market values at 5 December 2024 https://companiesmarketcap.com/


See also

Artificial intelligence
Thematic investing
Sustainable technology


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Important information This disclaimer applies to any documents and the verbal or written comments of any person in presentations or webinars on this website and taken together is referred to herein as the “Information”. The services to which the Information relate are NOT FOR RETAIL CLIENTS - The information contained in the Website is solely intended for professional investors, defined as investors which (1) qualify as professional clients within the meaning of the Markets in Financial Instruments Directive (MiFID), (2) have requested to be treated as professional clients within the meaning of the MiFID or (3) are authorized to receive such information under any other applicable laws and must not be relied or acted upon by any other persons. This Information does not constitute an offer to sell, or a solicitation of an offer to buy, any financial product, and may not be relied upon in connection with the purchase or sale of any financial product. You are cautioned against using this Information as the basis for making a decision to purchase any financial product. To the extent that you rely on the Information in connection with any investment decision, you do so at your own risk. The Information does not purport to be complete on any topic addressed. The Information may contain data or analysis prepared by third parties and no representation or warranty about the accuracy of such data or analysis is provided.
In all cases where historical performance is presented, please note that past performance is not a reliable indicator of future results and should not be relied upon as the basis for making an investment decision. Investors may not get back the amount originally invested. Neither Robeco Institutional Asset Management B.V. nor any of its affiliates guarantees the performance or the future returns of any investments. If the currency in which the past performance is displayed differs from the currency of the country in which you reside, then you should be aware that due to exchange rate fluctuations the performance shown may increase or decrease if converted into your local currency. Robeco Institutional Asset Management B.V. (“Robeco”) expressly prohibits any redistribution of the Information without the prior written consent of Robeco. The Information is not intended for distribution to, or use by, any person or entity in any jurisdiction or country where such distribution or use is contrary to law, rule or regulation. Certain information contained in the Information includes calculations or figures that have been prepared internally and have not been audited or verified by a third party. Use of different methods for preparing, calculating or presenting information may lead to different results. Robeco Institutional Asset Management UK Limited (“RIAM UK”) is authorised and regulated by the Financial Conduct Authority. RIAM UK, 30 Fenchurch Street, Part Level 8, London EC3M 3BD (FCA Reference No:1007814). The company is registered in England and Wales under Ref No. 15362605.

In all cases where historical performance is presented, please note that past performance is not a reliable indicator of future results and should not be relied upon as the basis for making an investment decision. Investors may not get back the amount originally invested. Neither Robeco Institutional Asset Management B.V. nor any of its affiliates guarantees the performance or the future returns of any investments. If the currency in which the past performance is displayed differs from the currency of the country in which you reside, then you should be aware that due to exchange rate fluctuations the performance shown may increase or decrease if converted into your local currency. Robeco Institutional Asset Management B.V. (“Robeco”) expressly prohibits any redistribution of the Information without the prior written consent of Robeco. The Information is not intended for distribution to, or use by, any person or entity in any jurisdiction or country where such distribution or use is contrary to law, rule or regulation. Certain information contained in the Information includes calculations or figures that have been prepared internally and have not been audited or verified by a third party. Use of different methods for preparing, calculating or presenting information may lead to different results. Robeco Institutional Asset Management B.V. is authorised as a manager of UCITS and AIFs by the Netherlands Authority for the Financial Markets and subject to limited regulation in the UK by the Financial Conduct Authority. Details about the extent of our regulation by the Financial Conduct Authority are available from us on request.