'Magnificent Seven' tech stocks rally after three months

The "Magnificent Seven" tech stocks saw a significant increase in value recently, marking a positive shift after months of poor performance. On Monday, all seven companies in this group experienced gains, with an overall rise of approximately 3.7%. Tesla led the surge, jumping over 11%, its best performance since November. Meta also contributed with nearly a 4% increase. This bounce back comes after the Magnificent Seven stocks lagged behind the S&P 500 index in 11 out of the previous 12 weeks. Tavis McCourt, a strategist at Raymond James, noted that this consistent underperformance reflects hedge funds pulling back from U.S. equities. He suggested that a broader market recovery depends on a change in this trend. Opinions on the future of these tech stocks vary among analysts. Morgan Stanley's Michael Wilson believes that recent earnings revisions for these companies show signs of improvement, potentially encouraging more investment. However, Mislav Matejka from JPMorgan disagrees, predicting that their recent gains won’t last and advising investors to consider more defensive options. Overall, while Monday's performance has sparked some optimism, uncertainty remains in the market about the sustainability of the recovery for these tech giants.