HOLT
HOLT: Recalibrating the Magnificent 8 – From Broad Exposure to Selectivity
The “Magnificent 8”, the largest US tech-driven companies, now account for ~30% of the total US market cap. Yet 2025 YTD price returns are split.
Diverging performance within the Magnificent 8
Diverging performance within the Magnificent 8
Although the group now represents a record ~30% of total US market cap, 2025 YTD price returns are split - half the group has outperformed the S&P 500, while the rest have lagged.
Value creation remains robust
Value creation remains robust
The group is forecast for CFROI to stay above 20% with 15% asset growth, leading to sustained Economic Profit (EP) growth. While market pundits voice concern on market concentration, EP for the group comprises over 30% of the US market’s total EP thus supporting market values.
Valuation for Magnificent 8 discounted vs historical levels
Valuation for Magnificent 8 discounted vs historical levels
HOLT’s Market Implied Yield (MIY) shows the Magnificent 8 is inexpensive versus the past 5 years, with their historical premium over the US market recently narrowing.
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