The "Magnificent Seven" stocks have paced the broader stock market for three years. That group comprises Amazon, Apple, Nvidia, Meta Platforms, Microsoft, Alphabet, and Tesla.
Unfortunately, Tesla hasn't been pulling its weight. Shares are down nearly 24% over those three years. It's the only "Magnificent Seven" stock down over that time; the next closest, Apple, is up 13%.
Is it time to remove Tesla from the group? Six stellar companies, each with larger market caps today, could replace it.
Here they are:
1. Berkshire Hathaway
Berkshire Hathaway (BRK.A +0.66%)(BRK.B +0.54%) has become a household name because of its association with famous investor Warren Buffett, who heads it. The holding company owns various private companies, ranging from candy stores to insurance, railroads, and utilities, and has a whopping stock portfolio worth hundreds of billions of dollars.
NYSE: BRK.B
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The company's diversified collection of high-quality assets has continued to grow and outperform the S&P 500 index for decades. Importantly, Buffett built Berkshire to last -- its assets include a whopping $167 billion cash pile just waiting for the right opportunity to scoop up a bargain. This company embodies long-term investing and would be a fantastic Magnificent Seven addition.
2. Taiwan Semiconductor Manufacturing
Nvidia, a current group member, may supply most of the world's AI chips, but Taiwan Semiconductor Manufacturing (TSM) (TSM 0.04%) builds them. TSM is the world's leading semiconductor manufacturing company. According to estimates, roughly 56% of the world's chips come from TSM. As the industry leader, it's a good bet that the advanced chips used for AI models will likely come from TSM.
NYSE: TSM
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That's a tremendous opportunity for a company already sporting a $631 billion market cap. AI experts believe that AI chip demand will soar over the coming years. AMD CEO Lisa Su estimates that the global chip business will rise to $400 billion by as soon as 2027. Remember, Nvidia, the AI chip leader, did $61 billion in total sales last year, so that's enormous market growth.
3. Eli Lilly
Healthcare is a massive industry, worth an estimated $4.5 trillion in the United States alone. Why not include one of the world's largest healthcare companies, Eli Lilly (LLY 0.04%), in the Magnificent Seven? The pharmaceutical giant is already worth $661 billion and has a significant footing in important care areas, including diabetes, weight management, oncology, and neuroscience.
NYSE: LLY
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Eli Lilly, through its offerings of Mounjaro and Zepbound, stands to benefit from the growth in demand for weight management drugs. Analysts believe the company's revenue will climb from $34 billion last year to $100 billion by 2032.
4. Novo Nordisk
Unfortunately, obesity is a prominent chronic condition among Americans and other developed economies worldwide. Its treatment is a healthcare niche that is too big for any one business, so Novo Nordisk (NVO +0.50%) is right there with Eli Lilly at a $585 billion market cap. The company goes back decades to its legacy insulin business and owns the popular drub Ozempic, which mimics the hormones that control hunger.
NYSE: NVO
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Novo Nordisk is on a similarly strong growth trajectory as Eli Lilly. However, investors should note that the company is more concentrated in the weight management field than Eli Lilly, which is a more diversified business. Analysts believe Novo Nordisk's revenue will grow from $34 billion to $78 billion by 2030.
5. Broadcom
The world is more connected than ever, and you can partially thank Broadcom (AVGO 2.08%) for that. The semiconductor company makes chips that go into most devices that connect to the internet. It also has evolved into a software company that provides technology solutions for corporations.
NASDAQ: AVGO
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Broadcom's business prospects look very promising. Connectivity will only increase as emerging markets modernize and developed countries dive head-first into AI. At $600 billion, this company is now a diversified technology behemoth and would look good next to Nvidia in the Magnificent Seven.
6. Visa
Money is the fundamental lifeblood of the global economy. Frequently, when you swipe your payment card, Visa (V +0.00%) is the company that moves your money out of your account to the merchant you are buying from. Visa is the world's largest payment network. An estimated 39% of worldwide noncash purchases run on Visa's network.
NYSE: V
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Society's gradual shift from cash as a payment method to plastic and digital payments has been significant for Visa. The business has grown to a $563 billion valuation today. Digital payments are projected to grow by an average of 15% annually from last year to 2030, making Visa a potential trillion-dollar stock over the coming years.
