Forget the US Magnificent 7 – Europe has its own version that has delivered better growth so far in 2024 – This is Money

• The main European technology stocks have increased by 15% since the start of 2024
• eToro says US seven’s grip on market loosens as Apple, Tesla slip

Europe’s top seven tech stocks recorded higher growth in the first three months of 2024 compared to the highly regarded US group Magnificent 7, according to eToro data.

The European “Magnificent 7,” which includes ASML, SAP, Adyen, RELX, Infineon, STMicroelectronics and Capgemini, grew 15 percent, outpacing the seven U.S. tech giants, which grew 12 percent.

The 7 Magnificent US Stocks: Apple, Amazon, Alphabet, Meta, Microsoft, Nvidia and Tesla, dubbed for their massive value and growth in 2023, are worth more than the stock markets of the UK, Japan, France, China and Canada combined.

The seven big hitters helped push the S&P 500 up 19 percent last year, when the index would have risen only 5 percent without their contribution.

These companies account for nearly a third, or 29 percent, of the value of the S&P 500.

While Mag 7s have undoubtedly proven to be wise investments, generating returns of 106% over 2023, eToro data indicates that in 2024, European tech stocks are generating more attractive margins so far .

However, over the past five years, American Mag 7 has generated returns of 291 percent, compared to 160 percent for European Mag 7.

The EU Mag 7, like the American version, is composed of technological actions. However, according to eToro, these stocks can benefit more because the European market does not have such technological dominance.

Ben Laidler, global markets strategist at eToro, said: “Europe’s ‘Magnificent 7’ have potentially benefited from a scarcity valuation premium, with the technology and communications sectors accounting for just 11 percent of the European market, compared to 40 percent. in the USA.

“Even though the European Mag 7 index has historically lagged its U.S. peers, it consistently outperforms the Stoxx 600 and is seeing significant momentum this year.

“At the top of the list is semiconductor company ASML, whose shares have surged 50 percent over the past year as its lithography machines fuel the massive growth of AI.”

He added: “On the other hand, with the recent declines of Tesla and Apple, the American Mag 7 appears to be loosening its collective grip on the markets.”

ASML, while by far the most valuable of the European Mag 7s, is overshadowed by its American Mag 7 competitors.

With a market capitalization of €364 billion ($454 billion), ASML is well ahead of the rest of the EU Mag 7, €150 billion ahead of the second largest, SAP.

Despite this, ASML lags behind even the smallest of the US Mag 7s, Tesla, which has a market capitalization of $492 billion.

The other six companies in the United States have a market capitalization of over $1 trillion, with Microsoft being the largest at $3.09 trillion.

Meanwhile, Granolas, the other set of European stocks expected to rival the Magnificent 7, is up just 4 percent so far this year.

Named after the combined first initials, which form Grannnllass, the eleven companies are “quality growth companies with international exposure,” according to analysts at Goldman Sachs.

The Granolas are made up of GlaxoSmithKline, Roche, ASML, Nestlé, Novartis, Novo Nordisk, L’Oréal, LVMH, AstraZeneca, SAP and Sanofi.

“Granolas shares have generated gains on the Stoxx 600 over the long term, but their defensive growth has lagged over the past year as investors look for more direct beneficiaries of upcoming interest rate cuts and economic recovery in Europe,” Laidler said.

“While Granolas offers a diversified portfolio at a lower valuation than the US Magnificent 7, investors may want to look to Europe’s biggest tech players for another way to benefit from global tech growth.”