As the Magnificent 7 Stalls, These 3 Stocks Are Gaining Momentum

Market Overview - In 2023 and 2024, a small group of seven stocks, referred to as the Magnificent Seven, delivered gains of over 160% [1] - As of February 20, 2025, the NASDAQ index is up about 8%, while the Magnificent Seven stocks are only up 1%, indicating a potential shift in market dynamics [2] Factors Affecting Performance - Investors are concerned about stretched valuations, the impact of capital expenditures on AI on earnings, and the effects of higher interest rates on borrowing [3] Investment Opportunities - There is a potential rotation trade emerging, suggesting that investors may consider moving funds out of the Magnificent Seven into other growth stocks [4] F5 Inc. (FFIV) - F5 Inc. provides distributed cloud services and reported first-quarter 2025 revenue of $747 million, a 7$2.00 earnings per share, a 23% increase [9] - The stock is up 32% in 2025 and 84% for the year, with analysts raising price targets above $100 [10] - The potential acquisition of Capri Holdings for$8.5 billion was blocked by the FTC, but this may benefit Tapestry's shareholders in the long run [11] Constellation Energy Corp. (CEG) - Constellation Energy has seen a 144% increase in stock price over the last 12 months, driven by a partnership with Microsoft to reopen the Three Mile Island nuclear plant [13] - The stock is currently trading above $300, which may indicate overextension, but there is underlying conviction as dips in stock price are being bought up [14][15] - Analysts are raising price targets for CEG, although it is not currently among the top recommendations from leading analysts [16]