"A worthy replacement for Tesla": analysts have named a new candidate for the Magnificent Seven

Wall Street analysts believe that chipmaker Broadcom could be a new contender to join the "Magnificent Seven" - a group of seven major U.S. technology companies that includes Apple, Microsoft, Amazon, Alphabet, Meta, Nvidia and Tesla. They said the company would be a "great replacement" for Tesla on the list or could possibly expand it to the "Magnificent Eight."

Wall Street analysts have started talking about Broadcom deserving a place on the elite list of the "Magnificent Seven," Bloomberg reports. Earlier, the "seven" players were pulling up the S&P 500 index, but now, amid Donald Trump's trade policy and macroeconomic instability, the dynamics of the shares of these companies are in a divergent way, the agency notes. Quotes of four of the seven - have gone negative since the beginning of 2025, with Tesla and Apple lagging the most.

Broadcom, on the other hand, continues to post solid growth thanks to custom chips and network semiconductors, key areas of focus in the AI boom. Amid the hype around artificial intelligence, the chip maker's revenues and profits have surged, with shares soaring 340% since the start of 2023: the company now has a market value of more than $1 trillion.

"We've seen Broadcom's business grow thanks to AI at the same time as Tesla's core business has been threatened. - pointed out Michael O'Rourke, Jonestrading's chief market strategist and one of those who first coined the term "Magnificent Seven" in early 2023. - Broadcom could be a worthy replacement for Tesla."

"Given the outlook, operating results and stock performance over the past couple years - it makes sense to include Broadcom in this group," agrees colleague Michael Cugino, president and portfolio manager of the Permanent Portfolio Family of Funds, which owns shares of the chipmaker.

However, not everyone is so inclined. Some believe that Tesla should still remain on the list. "If the goal of the Magnificent Seven is to highlight companies that are making structural changes through AI, then Tesla shouldn't be excluded, especially given their developments in robotics. Why not just do a 'Magnificent Eight'?" - says Mark Werner, portfolio manager at Laffer Tengler Investments (the fund has stakes in both Tesla and Broadcom). 

In fiscal 2025, Wall Street expects Broadcom's revenue to grow by 22% and 21% in 2026, Bloomberg notes, citing analysts. The company is second only to Nvidia, one of the main beneficiaries of the AI boom, in terms of these rates among the "seven" players. From Tesla, on the contrary, analysts expect a 1% reduction in revenue at the end of this year.

Broadcom shares have gained 8.5% since the start of 2025 after rising twice in 2023 and 2024. The company now has a market capitalization of about $1.2 trillion, making it the seventh most valuable company in the S&P 500 index - overtaking both Tesla and legendary investor Warren Buffett's Berkshire Hathaway.

Tesla quotes fell by almost 22% over the same period amid CEO Ilon Musk's political activism and regulatory risks.  

Shares of Broadcom are recommended to buy by almost 90% of analysts tracking their dynamics, and Tesla - only about 45%, according to data from MarketWatch. Wall Street's average target price on Broadcom shares suggests they're up 14% from the closing price on June 17, while Tesla quotes, on the other hand, are expected to fall 3%.