Forget the Magnificent 7 — Top tech analyst Mahaney recommends the ‘Electric Eleven’

Published Tue, Mar 12 202412:18 PM EDT

A new cohort of stocks may be emerging to steal the crown from the "Magnificent Seven," according to Evercore ISI. While the Magnificent Seven tech titans have boosted stocks to record highs, signs have already emerged that not all of those names will continue their ascent. By far, the two laggard stocks in the Magnificent Seven basket this year have been Apple and Tesla , plagued by weakened sales in the China market and down 10% and 28% this year, respectively. Apple's iPhone sales in China plummeted 24% in the first six weeks of 2024 , according to Counterpoint Research, in part due to stiff competition from rival smartphone companies. Likewise, a price war in the Chinese electric vehicle market has placed downward pressure on shares of Tesla. In a recent note from Evercore ISI, leading tech analyst Mark Mahaney offered a new basket of companies with the potential to outperform, dubbing them the "Electric 11." "We view these as the Highest Quality Net stocks, based on [total addressable market], management quality, product innovation, value proposition, and future premium growth/profit outlooks. We'd be very strategic and tactical in terms of how we'd weight this portfolio, but our strong sense is that this E11 portfolio would outperform nicely over the next several years," he wrote. This basket of stocks includes several names from the Magnificent Seven — and could grow to bring in additional stocks, Mahaney said. Mahaney included Magnificent Seven members Amazon , Alphabet and Meta in his new Electric 11 lineup. Amazon and Meta have respectively gained 16% and 40% this year, while shares of Alphabet are largely unchanged. On Monday , Morgan Stanley reiterated Meta at an overweight rating, while Goldman Sachs stood by its buy rating for Amazon. Bank of America reiterated its buy rating for Alphabet earlier this month. Another name that Mahaney included was online travel company Booking Holdings . The stock declined last month after issuing weaker-than-expected first-quarter guidance and is now down slightly on the year. Seaport Research initiated coverage of the stock at a buy rating in late February. "Booking.com's strong global position has enabled it to benefit from strong brand awareness which drives more direct traffic and hence higher margins (expect 33% EBITDA margins in 2023)," wrote analyst Aaron Kessler. Uber , up about 27% this year, is another name in the Electric 11. Shares received a boost after the ride-hailing company announced a $7 million share buyback program last month. In February , Bank of America reiterated its buy rating on the name and lifted its price target to $91 from $78. This implies Uber stock could rally more than 17% from Monday's close.