Megacap growth stocks have lagged for a few months, but some investors may see potential for the tide to turn.
The Nasdaq-100 led the market in the first half of 2024, powered by AI stocks like Nvidia (NVDA). It stalled in July as money shifted into sectors like real estate and utilities, which could benefit from lower interest rates. However some recent developments could suggest that optimism is mounting in the big names.
First came a report from Bloomberg on August 30 that Tesla (TSLA) will unveil robotaxis on October 10. While TSLA hasn’t confirmed the announcement, it could boost sentiment if true. (The event was previously slated for August 8.) That’s helped lift the stock 5.6 percent this month, making it the top-performing member of the “Magnificent 7” this month.
Elon Musk’s EV maker is the only Mag7 stock with a negative return this year, according to TradeStation data. It’s struggled with weak demand and lower prices for its flagship products, which heightens the potential importance of a successful transition to fully self driving (FSD) cars.
Amazon.com (AMZN), is also up slightly this month. Most of the gain came after Bank of America said its key AWS cloud-computing division stands to benefit from closer ties with companies like Oracle (ORCL), which yesterday jumped to new record highs on strong quarterly results.
AMZN and TSLA are the only Mag7 stocks classified as consumer discretionaries. Some traders may notice that the Select Sector Consumer Discretionary Index ($SIXY.X) has recently held its ground as the broader Nasdaq-100 fell. Are buyers starting to outnumber sellers?
Apple, Nvidia
Other large growth stocks that dominate the Nasdaq-100 are also in the news.
Apple (AAPL) released its AI-capable iPhone 16 on Monday. The new smartphone mostly met expectations, and AAPL moved sideways the following session.
NVDA could be more important because investors are worried about apparent delays to its new Blackwell chips, which are specially designed for AI. There could be news as early as today with CEO Jensen Huang speaking at the Goldman Sachs Communacopia + Technology Conference at 10:20 a.m. ET today.
Interestingly, Broadcom (AVGO) was the top-performing member of the Nasdaq-100 yesterday. The chip stock fell sharply last week after results and guidance failed to impress, but it’s now recouped most of the loss. (While not technically considered a member of the Mag7, AVGO vies with TSLA for the No. 7 spot in market cap.)
By the way, AAPL, NVDA and AVGO are members of the technology sector. The other big sector dominating the Nasdaq-100 is Communications, which includes companies like Alphabet (GOOGL) and Meta Platforms (META).
In conclusion, September tends to be a bearish month and large-cap growth stocks have lagged. But recent price action and news events may suggest investors are regaining interest in the group.
