The Magnificent 7 and the “Industrial Revolution” of AI

The high-tech sector has been more hyperactive than usual, as evidenced by recent data. Amazon surpassed $2 trillion in market capitalization for the first time, joining the exclusive club of US companies capable of this performance - previously achieved only by Apple, Microsoft, Alphabet, and Nvidia. Nvidia itself, with its annual shareholders meeting on June 26, experienced stock market roller coasters, historically surpassing Apple and Microsoft, followed by recent corrections.

In the interview with Class CNBC's "Mercati al giro di Boa", Mashfrog CEO Edoardo Narduzzi reviewed the stock market performances of the Magnificent 7: Meta, Alphabet, Apple, Tesla, Microsoft, Amazon, and Nvidia.

Nvidia, led by CEO Jensen Huang, "has a huge competitive advantage in chip production in the medium to long term," explained Narduzzi, "because it enhances all Big Corp investments in AI and will enable AI to reach end consumers through smartphones, gaming consoles, and PCs."

Despite the stock’s sharp ups and downs, "the likelihood that Nvidia will surpass Apple and Microsoft during 2025 to become the world’s most valuable tech company by market capitalization is very high," said the CEO of Mashfrog. Its success is a unique case worth watching closely—not only for its clear role in the development of AI, but also for the type of company and industry in which it operates.

"Nvidia is a manufacturing company—and manufacturing is extremely complex—that stands apart from Apple and Microsoft and marks the return of manufacturing leadership," said Narduzzi. "It has created a production process that generates an EBITDA of around 80%, and there has never been a manufacturing company this efficient on the planet. I believe Nvidia is already using AI to redesign and manage its production processes. It’s a champion of profitability, and this will drive its performance in the upcoming quarters of 2025."

Does the rise and central role of the Santa Clara-based company—whose CEO has announced a "new industrial revolution"—cast a shadow over the other Magnificent Seven? According to Narduzzi, this marks the beginning of a new chapter yet to be discovered, in which the other tech giants will also play their part. "Looking ahead to the upcoming earnings reports, Alphabet and Apple are the two most interesting stocks to watch, because they have an opportunity to unlock the value of their data assets and market positioning. While this potential is partly reflected in their stock prices, much of it has yet to be fully realized in their market valuation."

Apple, in particular, is worth watching. "Before Nvidia, it was the most efficient company in the world in terms of EBITDA margin; it has a number of loyal consumers with unique consumption potential on the planet," Narduzzi emphasized. "It faces various challenges because it cannot operate freely in the largest Asian market, China, due to geopolitical reasons and strong local competition. It also has more difficulty in the B2C sector to immediately exploit AI advantages. But investing in Apple is worthwhile because, alongside Alphabet, it will be a protagonist in the AI industrial revolution."