Last week, an interesting picture of triumph was painted in the stock market, with the technology sector taking the lead. Now, this may come as no surprise. The stars of the show were none other than several members of the so-called Magnificent Seven – Microsoft, Nvidia, Alphabet, and Meta.

It was primarily thanks to these titans of the global markets that clear outperformance was achieved in their participating industries. Considering their capitalization, these four members of the magnificent seven outperformed in the sector and their industries, helping the overall market close the week up an impressive 1.87%. Thanks to that dominant performance, the market has swung to positive territory on the year, up almost 0.3%.

So, with the first two weeks of the year in the books and witnessing the market seamlessly continuing its momentum from the previous year, one cannot help but wonder – will this trend persist throughout the year? Well, let’s delve deeper into each industry, exploring how these titans of the technology sector have set the stage for outperformance continuation.

The Software Industry

In the software kingdom, Microsoft (NASDAQ: MSFT) reigned supreme. Its stock performance spoke volumes, as it closed the week up an impressive 5.63% and overtook Apple (NASDAQ: AAPL) to become the world's most valuable company. 

The dominant performance came after the stock broke out of its multi-month consolidation and traded to a new all-time high of $390.68. Analysts continue to favor the software giant, placing a Moderate Buy rating and price target forecasting further upside. 

Notably, as the breakout experienced momentum, two analysts took bullish action on the stock. BMO Capital Markets increased its price target from $400 to $420, and Piper Sandler reiterated its rating of Overweight with a $455 price target.

The Semiconductor Industry

The semiconductor industry experienced notable relative strength last week, with the VanEck Semiconductor ETF (NASDAQ: SMH) closing the week up an impressive 4.14%. Surprise, surprise, its dominant industry player and top holding Nvidia (NASDAQ: NVDA) stole the spotlight. Nvidia’s stellar performance last week once again highlighted the crucial role of semiconductors in powering modern technology, making it one of the key players to watch this year. 

Like Microsoft, Nvidia broke out of a multi-month consolidation last week and experienced terrific momentum and an uptick in volume. As a result of breaking above significant resistance at $500, the stock closed the week up over 11% and achieved a new all-time high of $553.46.

The Internet and Content Industry

Now, turning our attention to the internet content and information industry, Alphabet (NASDAQ: GOOGL) and Meta Platforms (NASDAQ: META) stood out for their dominance. Alphabet, Google's parent company, oversees YouTube, Waymo, Mandiant, and various subsidiaries, dominating online search with over 90% of the market. Meta, formerly Facebook, rebranded in 2021, focusing on the metaverse and fostering social interaction across applications like Instagram and WhatsApp. With their diverse ventures and dominant market shares, these tech giants continue to shape the online content and information landscape significantly.

Shares of Alphabet closed the week up over 5% and are now in positive territory on the year, up over 2%. On a higher timeframe, the stock took out a critical level of resistance near $142 and is now fast approaching its all-time high near the $150 mark. Analysts are forecasting an upside, with the consensus price target of $149.06 predicting almost 4.5% upside. 

Like GOOGL, META closed the week up an impressive 6.4% and is now almost 2% away from its all-time high of $384.33. Unlike Alphabet, though, analysts are not forecasting an upside in META. The consensus price target of $358.07 forecasts a little over 4% downside. Despite the price target, META remains a Top-Rated stock with a Moderate Buy rating.