Even as the stock market is heads higher, the “Magnificent Seven” trade is beginning to fizzle, with Apple, Alphabet, and Tesla sputtering through the first quarter of 2024.
Hardika Singh for The Wall Street Journal:
The S&P 500 climbed 10% in the first quarter, its best start to a year since 2019, even though two of its biggest constituents suffered double-digit declines. Apple shares fell 11% in the first three months of the year, while Tesla dropped almost 30%. Alphabet shares sputtered for much of the period before making a run in the past three weeks and ending up 8%.
The other four big tech stocks in the group known as the Magnificent Seven — Nvidia, Meta Platforms, Microsoft, Amazon.com — continued their meteoric run and outpaced the broader market. Some market strategists have dubbed them the new Fab Four.
Nvidia continues to be a stock-market star. The graphics-chip maker has indicated demand for the computing power that underlies AI remains astronomical. Its shares have jumped more than 80% to start the year, after more than tripling in 2023.
Meta shares, meanwhile, have soared partly thanks to Meta’s investments in artificial intelligence that have made targeted ads smarter. The social-media company recently said it would pay its first shareholder dividend. Microsoft stole the crown of biggest U.S. company from Apple earlier this year, with a valuation that topped $3 trillion, and Amazon has sharply improved its profitability.
[Apple] is facing another weak iPhone demand cycle, and investors are worried that Apple is behind in the current wave of excitement around AI.
Bespoke Investment Group data show Apple shares underperformed the S&P 500 over the 200 days through Tuesday by the widest margin since October 2013.
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MacDailyNews Take: As we just wrote:
Apple was caught flat-footed, due to a lack of vision on the part of leadership. They were, uh, focused elsewhere. Apple’s traditional data center network is not fit for generative AI. It will take years and billions of dollars to catch up just to where GenAI leaders (OpenAI, Microsoft, Alphabet, etc.) are today.
So, the only solution is to partner with a Google for the real GenAI stuff while pretending (marketing) really hard that some on-device AI Apple has whipped up in a few months is “insanely great Apple innovation” that’s at the heart of Apple’s 2024’s AI announcements when it’s really just an adjunct. Apple will tout their homegrown on-device AI and act like it’s powering everything when, in reality, it’s Google (or whichever is licensed) that’s powering most of it. Watch Apple make a big show of its on-device AI at WWDC and run many ads touting it from June onwards.
Apple hopes to buy time for the data center buildouts and investments that will be required for them to someday own their own AI technology and not have to license it from the likes of Google.
This is what happens after a decade plus with a caretaker CEO at the helm after he hits the last page of his iteration playbook, yet attempts to stay in the game for too long.
See also:
• Work on Apple Vision Pro began under Steve Jobs – August 23, 2023
• Contrary to popular belief, Steve Jobs knew about Apple Watch – February 13, 2023
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Things are moving rapidly in AI. People are talking about massive new data centers that have not been built yet, and Apple could possibly do a major-catch-up or leap-frog even with a multi-billion dollar data center dedicated to their own LLM Generative AI. Having to depend on Google just doesn’t sit well with me and the optics are not good.
If you ask Gemini about Apple’s “approach to AI” it replies:
Generative AI: This is an area where Apple is acknowledged to be playing catch-up
Generative AI involves things like writing different kinds of creative text formats, and Apple’s Siri assistant is seen as lagging behind competitors like Alexa or Google Assistant.
Privacy-focused AI: Apple prioritizes user privacy, which can limit the amount of data they can collect to train AI models. This can be a disadvantage compared to competitors who are “less restricted.” <— LOL
Overall AI strategy: Some argue that Apple is taking a different approach to AI, focusing on efficiency and on-device processing rather than chasing the latest trends. They’re also doing research to improve AI capabilities for the entire industry.
So, it’s a mixed picture. Apple may be behind in some areas of AI, but they’re also taking a different strategic approach with a focus on privacy and efficiency.
Apple also doesn’t seem to have any of the “big names” in AI working for them. They have been running around purchasing companies that have specific AI technologies, but their direction is still less than clear.
By the way, if you haven’t tried Google’s notebookLM, you must.
Brief: I took all my notes and documents on Synology NAS and their DSM operating system, and I also transcribed youtube videos on the same subject and dumped it into notebookLM and basically created an AI Synology Consultant that I could just have a converstation with.
So I can ask this thing that was previously completely empty a question like:
What are the key features and benefits of Docker Hub in DSM 7.2?
and it answers…
Docker Hub is integrated into DSM 7.2
Key Features:
Easy to use: Head down to the registry, select a VM, and download it or open it in Docker Hub to discover more details.
User-friendly: Create your brand-new container, give it a name, choose which Docker images you’re downloading and utilizing, set hardware utilization, and navigate the setup process.
Safe: Docker Hub allows you to analyze the health and security of your system at the touch of a button.
Benefits:
Variety of Applications: Access to deploying containers in DSM extraordinarily easily.
Extensive Configuration Options: Utilize multiple NAZs, storage areas, networks, or download different kinds of images.
Enhanced Security: Change the login port to be unique and modify security services.
I will check it out, thanks for the heads up. I fear this type of thing will be TOTALLY absent from Apple’s offering. We’ll have to turn to third-party apps, web browsers and yes, Android, Microsoft and other devices. Cupertino hates this kind of freedom now.
With partnerships with Nvidia (and soon Apple) for AI, I don’t doubt it will take long for Google to join the ‘Fab Four’.