After Fed Rate Cuts, Is Tesla, Nvidia, Apple, Or Amazon The Best Investment? Poll Reveals Top Magnificent 7 Stock

The Federal Reserve's decision to cut interest rates could positively impact stocks, consumers, and several key sectors.

Benzinga readers were recently asked to pick which Magnificent Seven stocks could benefit the most from the interest rate cut.

What Happened: The Federal Reserve's decision to cut interest rates could benefit small-cap stocks the most, with loans cheaper for companies that need capital to continue growing.

Interest rate cuts could also benefit consumers as mortgage rates decline, auto loans get cheaper and credit card fees get lowered as a trickle-down impact from the Federal Reserve's decision.

Along with small cap stocks, the overall stock market could benefit including the Magnificent Seven stocks that are among the most valuable and most-followed stocks in the U.S.

"Which Magnificent 7 stock will perform the best during the rate-cutting cycle," Benzinga recently asked readers.

Here are the results:

• Tesla Inc (NASDAQ:TSLA): 24%
• NVIDA Corporation (NASDAQ:NVDA): 21%
• Amazon.com Inc (NASDAQ:AMZN): 19%
• Apple Inc (NASDAQ:AAPL): 13%
• Microsoft Corporation (NASDAQ:MSFT): 8%
• Meta Platforms (NASDAQ:META): 8%
• Alphabet Inc (NASDAQ:GOOG) (NASDAQ:GOOGL): 8%

Tesla won the poll as the stock that will perform the best during the rate-cutting cycle with nearly a quarter of the vote. The stock could be popular given auto loans could come down in price and consumers having less concerns about higher prices all around could mean new auto purchases become more of a possibility.

Investors may also have picked Tesla in the poll as it is the Magnificent Seven stock with the worst year-to-date and one-year performance.

Here are the current performances of the Magnificent Seven stocks:

• Tesla: Year-to-Date +2.5%, 1-Year +3.1%
• Nvidia: Year-to-Date +157.6%, 1-Year +193.9%
• Amazon: Year-to-Date +28.6%, 1-Year +46.9%
• Apple: Year-to-Date +21.4%, 1-Year +28.0%
• Microsoft: Year-to-Date +16.5%, 1-Year +36.0%
• Meta: Year-to-Date +64.7%, 1-Year +89.6%
• Alphabet: Year-to-Date +17.6%, 1-Year +23.9%

The Magnificent 7 stocks have mostly outperformed the SPDR S&P 500 ETF Trust (NYSE:SPY), which tracks the S&P 500 Index. The SPY is up 20.8% year-to-date and has climbed 32.1% over the last year, beating three Magnificent 7 stocks year-to-date and three stocks over the previous year.

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What's Next: With less than three months left in 2024, investment appetite for Magnificent Seven stocks could change, with investors looking for small-cap winners or stocks that could perform well after the 2024 election.

Benzinga readers recently voted Nvidia as their top Magnificent 7 stock to retire on, with 33% of the vote. Apple and Microsoft ranked second and third, with 21% and 17%, respectively.

In August, Benzinga readers said the Magnificent Seven stock they were most likely to invest $1,000 in was Nvidia at 44% of the vote, followed by Apple (13%) and Amazon (11%).

The different polls show varying interest in the Magnificent Seven stocks depending on the investment angle. Tesla did not rank in the top three of recent polls until investors were asked about the investment angle of rate cuts.

For investors looking to get exposure to all the Magnificent Seven stocks, there is also the Roundhill Magnificent Seven ETF (NASDAQ:MAGS), which holds the seven companies. The ETF is up 45% year-to-date and up over 57% in the past year.

The study was conducted by Benzinga Sept. 19 through Sept. 20, 2024, and included the responses of a diverse population of adults 18 or older. Opting into the survey was completely voluntary, with no incentives offered to potential respondents. The study reflects results from 210 adults.

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