The soft-landing scenario that investors see for next year points to further gains in US stocks. But it also dims the prospect of another stretch of wild outperformance for the technology giants that dominated in 2023.

One of the key themes behind the Magnificent Seven’s surge, which generated nearly two-thirds of the S&P 500 Index’s advance this year, appears to have faded in importance for investors: With recession fears swirling, the tech behemoths’ earnings growth, combined with robust cash flow and balance sheets, made them haven stocks.

With added fuel from the AI boom, the group rose almost 100% through mid-July, compared with roughly 20% for the S&P 500. But as confidence in the economy grew after the Federal Reserve’s July interest-rate hike, which investors now see as the last of this cycle, the tech titans’ gains became more muted. Since the end of July, the group is up almost 7%, while the broad market has risen around 4%.

There’s still a camp of economists predicting the Fed will trigger a recession as it battles inflation. But for now, investors are embracing the soft-landing view, broadening their horizons to smaller tech stocks and other sectors that had been beaten down for much of 2023.

“The only way they stay the Magnificent Seven is if we have less than a perfect landing,” said Rhys Williams, chief strategist at Spouting Rock Asset Management. “Still, from a portfolio-construction point of view, I think they’re good hedges, even if they pause for a while.”

Below is a roundup of where the seven largest stocks in the S&P 500 by market value — Apple Inc., Microsoft Corp., Google parent Alphabet Inc., Inc., Nvidia Corp., Tesla Inc. and Facebook owner Meta Platforms Inc. — stand heading into 2024.

Apple has soared nearly 50% this year to a record, pushing its market value to $3 trillion, greater than any other company in the world. The bulls say there’s still room to run, in part because of its market-leading position.

“Even though it seems incomprehensible at this moment, I think Apple will continue to grow until there’s a replacement for what they do, and I just don’t see any,” said Kim Forrest, chief investment officer of Bokeh Capital Partners LLC.

Of course, there are obstacles ahead. A recovery in its cyclical iPhone and personal computer sales may not come until the second half of 2024, and its growth also depends on the strength of China’s consumers. Apple has also been slower than other Big Tech peers on artificial intelligence, a crucial growth area.

Microsoft also set an all-time high this year on optimism over AI and cloud growth as it’s been able to integrate OpenAI’s ChatGPT technology into its products.

It’s likely the best-positioned of its Magnificent Seven peers to capitalize on the potential of AI, some investors say.

“We think Microsoft is going to be a big winner in this race,” because they’re starting to show how they can monetize the product, said Jamie Meyers, a senior equities analyst at Laffer Tengler Investments.

Amazon’s rise since October has left the shares up more than 80% this year. An earnings beat that showed stabilizing growth in its AWS cloud unit helped spur the stock.

“Amazon is almost like a late bloomer here,” said Ken Mahoney, president of Mahoney Asset Management. “But they also have a really great opportunity in AI, especially in the cloud.”

Amazon is well below its 2021 closing high of about $187 per share, giving investors a sense of the possible upside.

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