S&P 500: Investors load 3 stocks other than the “Magnificent 7”

If everyone seems to own the “Magnificent Seven” S&P 500 shares, you’re right. But most investors also load up on some less obvious stocks.

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Three stocks, incl advanced micro devices (AMD), Berkshire Hathaway (BRKB) And SoFi Technologies (Sufi), on the 10 most popular stocks across all generations, says Investor Business Daily’s analysis of data released as recently as June 30 from Apex Fintech Solutions, S&P Global Market Intelligence, and MarketSmith.

This holding is popular with all investors, regardless of whether they’re baby boomers or millennials, highlighting where most doubt big stock gains will come after the tech stock’s rally fades.

“Megacap’s weakness and ratings put the sector short for a downgrade,” said Rob Anderson, US sector strategist at Ned Davis Research.

Life Beyond the Magnificent Seven in the Standard & Poor’s 500

It’s easy to see why investors piled into the same seven S&P 500 stocks. It’s working — this small group of stocks is driving most of the S&P 500’s gains this year. But for how long?

seven splendid arrows, Tesla (TSLA), apple (AAPL), Amazon.com (AMZN), nvidia (NVDA), Microsoft (MSFT) And the alphabet (Google), up 87% this year alone. This far outpaced the S&P 500’s 16.3% gain. It tops the 37% gain in Invesco QQQ Trust (QQQ).

But some of these stellar stocks are showing pressure. Take Apple for example, the second most popular stock held by investors after Tesla, says Apex.

Shares of Apple are up nearly 37% this year despite poor fundamentals. In its just-reported second-quarter results, Apple showed a year-over-year decline in revenue for the third consecutive quarter. In addition, shares of Apple fell below their 50-day average price for the first time since January, according to Bespoke Investment Group. Bespoke says that a dip below this trading level typically results in inventory weakness.

Many investors seem to be hedging their bets.

AMD: Best S&P 500 pick out of The Magnificent Seven

After the Magnificent Seven, computer chip maker AMD is investors’ most popular holding. It’s no slouch either. Shares are up 66% this year alone.

And just like Apple, AMD’s quarterly earnings are on the decline. On August 1, the company reported quarterly earnings of 58 cents per share for the June quarter. Views topped. But it is down 44% from the same period last year. Earnings also fell in the March and December quarters.

But investors are looking for growth from AMD. The company’s earnings are expected to rise 1.4% in the September quarter and 29% in the December quarter.

Rounding up the top 10 stocks for investors

After AMD, investors also hold positions in financial giants such as Warren Buffett’s Berkshire Hathaway and SoFi.

Berkshire Hathaway, ironically is a big bet on the Magnificent Seven. Its largest public holding is Apple. However, Berkshire Hathaway adds at least a handful of companies from other industries such as insurance and railroads. Analysts believe Berkshire Hathaway’s earnings will rise more than 27% this year. That certainly beats the anemic 0.8% earnings growth that analysts expect coming from the S&P 500 this year, FactSet says. Shares of Berkshire Hathaway are up just 16% this year.

Another top 10 company holding investors, SoFi, surprises on multiple fronts. For example, it’s up nearly 88% this year. This means the bank is outperforming the Magnificent Seven stock average. Plus, it’s not obvious to own a great stock because it’s not in the S&P 500. The company, which is only worth $8 billion, is on track to lose money in 2023.

But with SoFi, and most of these popular stocks, investors are preparing for what’s next. SoFi is expected to turn a profit on an adjusted basis in 2025.

And for investors, that sounds great.

The most popular stocks with investors

Sources: Apex, S&P Global Market Intelligence, IBD. Portfolio rated June 30, 2023. Market gain as of August 11, 2023

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