"Mag 7" is Now Worth More Than All Major Stock Markets Except the US: Who Among Them Boasts the Strongest Profitability?

Mega-cap tech stocks continue to lead the U.S. stock market higher this year, driving major indices such as the $S&P 500 Index(.SPX.US)$ and $NASDAQ 100 Index(.NDX.US)$ to record highs. Among the Magnificent 7 this year, the most impressive performer is $NVIDIA(NVDA.US)$, which has risen nearly 60% since the beginning of the year, followed closely by $Meta Platforms(META.US)$ with almost a 40% increase.

Reviewing the latest earnings season, the profitability gap between the Magnificent Seven has become increasingly evident. Among them, AI leader $NVIDIA(NVDA.US)$ once again demonstrated its leading position, benefiting from the rapid development of AI technology and the expansion of AI applications, delivering impressive results. Its revenue soared to $22.1 billion in the quarter ending January 28, up 265% from the previous year's $6.05 billion. A whopping 83% of the revenue is contributed by the data center business, up from only 40% two years ago. The latest quarter saw the data center performance surge by 409%, reflecting the increased shipments of $NVIDIA(NVDA.US)$'s Hopper GPU used for training and inference of large language models and generative AI applications. $NVIDIA(NVDA.US)$'s net profit surged 769% from $1.41 billion to $12.29 billion, far exceeding analysts' expectations. Gross margin also rose from 63.3% in the same period last year to 76%, highlighting the profitability of $NVIDIA(NVDA.US)$'s "sales shovels" in AI.

The market wasn't particularly impressed with the $Alphabet-A(GOOGL.US)$ and $Apple(AAPL.US)$ reports, but they both recorded net income growth of 51.8% and +13.1% respectively in the latest earnings season.

Meanwhile, EV leader $Tesla(TSLA.US)$ once again disappointed investors, with total revenue in the fourth quarter of last year growing 3% YoY to $25.17 billion, lower than the expected $25.6 billion, and adjusted earnings per share plummeting 40% YoY to $0.71, still lower than the expected $0.74.

$NVIDIA(NVDA.US)$'s impressive profitability and stock price have not only become a significant factor driving the US stock market but also further spurred the expansion of the global AI wave and the rise of global stock markets. Compared to the rising trend driven by expectations of a US Fed rate cut at the end of last year, the steadfast belief in AI and NVIDIA's further upward momentum have supported the development of the US stock market since 2024. The S&P 500 has risen 6.7% to date, while market expectations for a Fed rate cut have been pushed back from as early as March to June or even the second half of the year. Some have joked that investors seem to care more about NVIDIA CEO Jensen Huang than about Fed Chairman Jerome Powell.