Magnificent 7 stock pullback now looks like a buying opportunity, strategist says

Key Points Stabilization in the Mag 7 "would be an important positive for the broader market," according to Fundstrat technical strategist Mark Newton. Mag 7 has dominated the U.S. market with a combined valuation of around $22.62 trillion Recent weakness in the Magnificent 7 stocks now looks to be an opportunity for investors, given that US equity trends remain bullish in the near term, said Mark Newton, head of technical strategy at Fundstrat. Within the Mag 7, Microsoft, Meta, Alphabet and Amazon have fallen roughly to two-month lows and the underperformance now looks mature, Newton said. "It's right to start looking for relative strength to reassert rather than chasing the weakness," he said, adding that a stabilization in the Mag 7 "would be an important positive for the broader market, with the possibility of falling crude, yields, and the US dollar." The group dominates the U.S. market with a combined valuation of around $22.62 trillion, led by artificial intelligence chipmaker Nvidia at $5.13 trillion, according to research firm Vanda. However, questions about the sustainability of growth in AI, as well as competition from the likes of Chinese rivals are among factors that have weighed on their shares. Newton isn't the only analyst seeing potential for a rebound in the shares. …