This Will Be the Next “Magnificent Seven” Stock

The “Magnificent Seven” originally made the headlines as a Western back in 1960, but in recent times, it’s entered the investing world. Bank of America analyst Michael Hartnett first used the term last year to refer to a group of stocks that are industry leading, each known for its strengths in some form of technology. These players, among the most heavily weighted in the S&P 500, have helped the benchmark soar into bull territory over the past year or so and could continue to drive gains thanks to their growth prospects.

These top stocks are: Alphabet, Apple, Amazon, Meta Platforms, Microsoft, Nvidia, and Tesla.

But there’s one obvious element missing from this group: a healthcare company that’s actually outperformed five of the Magnificent Seven stocks over the past year. And this player also now represents a bigger position in the S&P 500 than one of the Magnificent Seven stocks. Is this company on track to become the next Magnificent Seven company? Let’s find out.

Image source: Getty Images.

A path to the Magnificent Seven?

First, it’s important to note that the Magnificent Seven isn’t some sort of group or club that periodically welcomes new members. So, for Lilly to usher in the era of the “Magnificent Eight” or for a new stock to replace a current player in the Magnificent Seven, there aren’t any official procedures to follow. The investment community as a whole would have to begin referring to this group as the “Magnificent Eight” – or clearly and broadly refer to one stock no longer making the cut in the Magnificent Seven and another taking over.

There’s no guarantee any of that that will happen. But if it does, my prediction is healthcare giant Eli Lilly (NYSE: LLY) will enter this elite group of stocks. Lilly, gaining about 130% over the past year, has outperformed all of the Magnificent Seven except Meta and Nvidia — they climbed more than 140% and 250%, respectively.

And Lilly has grown to become the eighth most heavily weighted stock in the S&P 500, surpassing Tesla, which has fallen to the No. 10 spot.

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