Jim Cramer, the host of CNBC’s “Mad Money,” has hinted at the possibility of Tesla Inc TSLA being replaced by Eli Lilly and Co LLY in the “Magnificent Seven” list of mega-cap stocks.
What Happened: Cramer, in his show on Monday, suggested that Tesla might be on a “growth pause” compared to its Big Tech counterparts, reported CNBC. He said that if Tesla loses its position, Eli Lilly could be a strong contender to take its place.
The “Magnificent Seven” currently comprises Apple Inc AAPL, Amazon.com Inc AMZN, Alphabet Inc GOOGL GOOG, Meta Platforms Inc META, NVIDIA Corp NVDA, Tesla, and Microsoft Corp MSFT.
Tesla’s stock has dropped by almost 16% in 2024, with factors such as fierce competition from Chinese EV-makers and potential market saturation in the U.S. contributing to this decline. The automotive industry’s focus on EVs also seems to be waning, with companies like Hertz Global Holdings Inc HTZ and General Motors Co GM making significant decisions.
See Also: Bitcoin, Ethereum, Dogecoin Drop As Google Search Interest In Spot ETFs Plunges
On the other hand, Eli Lilly, with a market capitalization of nearly $600 billion, is a major player in the pharmaceutical industry. Cramer referred to investor Ken Langone‘s prediction that Lilly could be the first drug maker worth $1 trillion.
“We’re ready no matter what, but to ignore the decline of Tesla or the advance of Eli Lilly is to reject the facts,” Cramer said.
Why It Matters: Cramer’s prediction aligns with his previous comments on the “Magnificent Seven.” He had suggested that Tesla might be the first to fall from this group due to the company’s performance and the behavior of its CEO, Elon Musk.
On the other hand, Eli Lilly has been on an upward trajectory, with Cramer predicting continued growth for the company in the pharma industry. The company’s stock surged to a record high in August following strong second-quarter earnings and positive data from Novo Nordisk A/S NVO for its weight loss drug Wegovy.
Despite the potential shift in the “Magnificent Seven,” Cramer has also predicted a sector rotation away from the leading tech stocks, including the “Magnificent Seven,” to industries that have seen significant declines, such as the food and pharmaceutical sectors.
Read Next: Seizing India’s Investment Opportunities In 2024 With Octa
Image Via Shutterstock
Engineered by Benzinga Neuro, Edited by Kaustubh Bagalkote
The GPT-4-based Benzinga Neuro content generation system exploits the extensive Benzinga Ecosystem, including native data, APIs, and more to create comprehensive and timely stories for you. Learn more.
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
Comments
Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.
