Investing in the "Magnificent Seven" stocks could generate $925 in annual dividends for a $350,000 investment.

From Nasdaq: 2025-01-19 07:13:00

The “Magnificent Seven” technology companies have a combined value of $17.2 trillion and delivered an average return of 60% in 2024, responsible for over half of the S&P 500’s 25% gain. AI is driving growth, with Nvidia leading the pack. Five of the seven stocks pay modest dividends, but capital growth remains the key attraction.

Investors who didn’t have the Magnificent Seven stocks likely underperformed the market. Nvidia, Microsoft, Amazon, and Alphabet are driving growth with AI. Meta Platforms uses AI for content curation, while Apple focuses on AI distribution to consumers. Tesla’s full self-driving software and Cybercab are future revenue drivers.

Five of the Magnificent Seven stocks pay modest dividends, with Microsoft offering the highest yield. Dividend payments are a bonus to capital growth, with $925 in annual dividend payments for a $350,000 investment. Stock buybacks are also used to reward shareholders, with a combined $236.9 billion spent by five companies in the last year.

The Magnificent Seven stocks are likely to continue delivering capital growth due to their involvement in the AI revolution. Investors should consider owning these stocks for the long term. While dividends are modest, the focus remains on capital growth. Nvidia is not among the 10 best stocks to buy now, according to the Motley Fool Stock Advisor team.

Consider the 10 best stocks identified by the Motley Fool Stock Advisor team, with Nvidia not making the cut. Stock Advisor has outperformed the S&P 500 since 2002, offering guidance on building a successful portfolio. Suzanne Frey, an executive at Alphabet, is a member of The Motley Fool’s board of directors.



Read more at Nasdaq: Here’s How Much You Could Earn in Dividends From a $350,000 Investment in the “Magnificent Seven” Stocks