An $803-billion company most people have never heard of just knocked Tesla out of the Magnificent 7

Source: Fortune

The overlooked Magnificent Seventh is Broadcom, a tech company that produces both hardware and software. It’s well known in the infotech world but unfamiliar beyond it. The Magnificent Seven, conceived as a group of stocks in early 2023, are the most valuable U.S. tech companies by market capitalization. In descending order they include Apple (recent market cap: $3.4 trillion), Microsoft, Nvidia, Alphabet, Amazon, Meta, and Tesla (recent market cap: $768 billion). Yet Broadcom’s market cap slipped past Tesla’s last spring and has stayed ahead of the EV-maker for most of the year. Its market cap is currently around $803 billion.

Broadcom is not guaranteed to stay ahead of Tesla, at least in the near term. Tesla’s stock is notoriously volatile, and its market cap could plausibly beat Broadcom’s for a time. But Broadcom’s long-term outlook is by far the sunnier of the two. Wall Street analysts on average expect its stock price to keep climbing, while they expect Tesla’s to continue to fall. Tesla’s stock has retreated to where it was almost four years ago, while Broadcom’s is up 290% since then.

Wall Street approves of Broadcom’s changes. “They appear to be killing it on VMware,” says Bernstein analyst Stacy Rasgon, “which markedly exceeded expectations in the quarter and which seems poised to continue growing.”

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