A small group has dominated the stock market in recent years, known as the “Magnificent Seven.” These select stocks have experienced exponential growth, with some surging by almost 20,000% over the past decade. However, only one member, Tesla, has shown a decline in performance, prompting calls for its removal from this elite group.
Shifting Tides in the Race to $1 Trillion
While Tesla’s future in the Magnificent Seven is uncertain, there is a contender on the rise – a $900 billion giant waiting in the wings. This player, not as tech-centric as its counterparts, but poised for potential trillion-dollar status, could be the next big winner.
Many trillion-dollar entities today are tech-focused, like Alphabet, Meta Platforms, Apple, Amazon, Nvidia, and Microsoft. Standing at nearly $900 billion in market cap, Berkshire Hathaway is within reach of the coveted $1 trillion milestone. Tesla, in contrast, lags with a $570 billion market cap, making Berkshire a more fitting member of this exclusive club.
Could Berkshire, known traditionally for its insurance and investment activities, be a tech stock in disguise? Surprisingly, yes. The conglomerate’s top holding is in Apple, with an eye-watering value of $168 billion, a considerable chunk of Tesla’s worth.
Comparing Value in a Volatile Market
Despite differing business models, Berkshire Hathaway and Tesla are ripe for comparison in the investment landscape. While Tesla stands at a premium relative to automakers like Ford and General Motors, Berkshire offers a more measured valuation, albeit still higher than its peers. Tesla’s steep premium surpasses 200% compared to Rivian’s price-to-sales ratio, a stark contrast to Berkshire’s more reserved figures.
In a market where value is paramount, Berkshire Hathaway emerges as a sound investment choice with its established track record. Though unlikely to join the ranks of the Magnificent Seven due to its tech-centricity, Berkshire harbors tech investments that may surprise many.
Despite Tesla’s allure, Berkshire Hathaway shines as a prudent buy. Tesla’s lofty valuation compared to its peers and Berkshire’s stable positioning make the latter a compelling option for investors. While Tesla’s fate in the Magnificent Seven remains uncertain, Berkshire is a solid contender for a spot in your investment portfolio.