Everyone can see Zack laughing, but who understands Musk's bitterness?
Last year, the "ZUCK vs MUSK" battle that once made all melon eating people eagerly wait for it unfortunately did not unfold as scheduled. However, if we turn our attention to the capital market, it seems that these two individuals are now in another "fighting arena", with a clear winner
Tesla, which has had a market value higher than Meta for a long time since 2022, is now far behind this social media giant - with Meta's stock price closing up 20.32% this Friday, reaching a historic high of $474.99, its daily market value increase of about $1970 billion has also set a new record in US stock history. By contrast, Tesla has been plummeting all the way this year, with a cumulative decline of about 24%.
At present, the market value of Meta has reached $1.21 trillion, which is more than twice that of Tesla ($57.7 million)!
And when we expand our observation scope to compare with the so-called "Magnificent Seven" US technology stocks that Wall Street has been talking about over the past year, Tesla's current weakness seems even more apparent: in the 12 months ending this Friday, only Tesla's stock price has fallen so far - it has fallen by about 4% since the close on February 6th last year.
The so-called "seven giants" of the US stock market - Apple, Microsoft, Amazon, Google's parent companies Alphabet, Meta, Nvidia, and Tesla - experienced an unusually rapid rise last year and played a significant role in driving the US stock market to a historic high.
Due to the continued strong rise in stock prices of giants such as Meta and Nvidia throughout the year, the weight of this technology giant portfolio in the S&P 500 index has now reached 28.6%, higher than the 27.8% at the end of 2023. According to LSEG's data, this is close to the highest weight percentage in the history of this combination.
However, many Wall Street insiders currently indicate that Tesla's recent sharp decline seems to have begun to threaten its position in this giant portfolio.
Wall Street discussion: Should Tesla be "fired" from the Big Seven?
Brandon Michael, senior investment analyst at ABC Funds, said that the current landscape of the US stock market seems more like the "Magnificent 6".
He pointed out that "Tesla is facing many problems, including competition from Chinese electric vehicle manufacturers, price reductions, and shrinking profit margins. Even Musk himself has admitted that the Dojo supercomputer is an unattainable goal."
From a fundamental perspective, high borrowing costs, reduced government subsidies leading to weakened demand, and significant price reductions across regions are all challenges that this electric vehicle pioneer is facing. At the financial report meeting held earlier this month, Tesla CEO Musk personally warned that despite sacrificing profit margins to attract consumers, sales growth this year may slow down, which has raised concerns among investors about weak demand for Tesla cars and the company facing more intense competition.
In terms of technology, as the stock price has fallen nearly 24% so far this year, Tesla's daily moving average has also formed a "dead cross" shape on Thursday - the 50 day moving average fell below the 200 day moving average.
Some technical traders interpret this sign as a possible indication that Tesla will face more losses in the future.
In fact, the nickname of the US tech giant portfolio has never been unchanging.
Before the popularity of the term "Big Seven", investors had also proposed the term FANG, initially referring to Facebook, Amazon, Netflix, and Google, and later to FAANG including Apple. In the Internet boom in the late 1990s, investors once swarmed into the so-called "four knights" - Cisco, Intel, Dell and Microsoft. Nowadays, the size of the first three is no longer comparable to Microsoft!
This also raises questions about whether Tesla will be the first to be "fired" from the Big Seven in the future?
Who can still "replace" Tesla in US technology stocks?
Of course, if people still plan to retain the "Big Seven" title in the future, it seems that they can also plan ahead: which other American technology giants are enough to replace Tesla?
Many institutional investors have expressed that the next giant to take over Tesla is likely to be a company that successfully monetizes the booming momentum of AI development.
Some people believe that American communication chip giant Broadcom seems to be a good choice - in terms of market value ranking, Broadcom currently ranks second only to Tesla in the global enterprise market value list, with a market value difference of only about $25 billion between the two.
Michael from ABC Funds believes that Broadcom will be a major competitor, as the company's market value has doubled last year, and traders are betting that the company's recent acquisition of VMware will bring further boost. "If I were to choose another Big Seven company, it would be Broadcom, which is a leader in the field of custom chips and is driving the artificial intelligence revolution," Michael said.
Apart from Broadcom, another market favorite is AMD - a major competitor of Nvidia, which produces chips for all graphics processing units needed for artificial intelligence. Its market value more than doubled last year.
Chris Beauchamp, Chief Market Analyst at IG Group, stated that although AMD's market value may pale compared to Tesla, it may still stand out as it is another major beneficiary of the current AI revolution.
If the other options mentioned above to replace Tesla cannot reach consensus in the industry, and Tesla's stock price continues to "go south" in the future, then for Wall Street, the simplest approach may be to directly reduce the number of employees from the "Big Seven" to the "Big Six".
As for who will be the next to fall behind after the "Seven Heroes Era" falls behind? Let's go ahead and see