[News Terms] AI Takes the Lead, 'Fab4'

Recently, in the US stock market, the 'Fab4,' which branched out from the Magnificent 7 (M7), has been attracting attention as leading stocks.

[Image source=Getty Images Yonhap News]

'Fab' is an abbreviation of Fabrications, meaning semiconductor manufacturing plants. Fab4 refers to the consortium (Fab4) led by the US to expand and strengthen collaboration in the semiconductor supply chain. Among the companies belonging to the Magnificent 7, the four companies?Nvidia, Meta, Amazon, and Microsoft (MS)?which have continued their rally this year, are referred to as Fab4, named after the 'Fab4 consortium' consisting of the four major semiconductor manufacturing countries: Korea, the US, Japan, and Taiwan.

In particular, Fab4 also implies the meaning of 'Fabulous' four companies, as the stock price rise of these four companies was remarkably outstanding. Nvidia, which has been spotlighted as an AI semiconductor stock, surged 83% in the first quarter alone, leading the sharp rise of the New York stock market. Meta, Amazon, and MS also rose by 37.2%, 18.7%, and 11.9%, respectively, during the first quarter. In contrast, Tesla and Apple, which also belong to the Magnificent 7, fell sharply by 29% and 11%, respectively, marking the largest declines in the first quarter, showing a stark contrast. Google's parent company Alphabet's stock price rose by only 8%.

On Wall Street, it is evaluated that the strong rise of more than 10% in major New York indices such as the Standard & Poor's (S&P) 500 index and the Nasdaq index during the first quarter this year was thanks to Fab4, which was spotlighted as AI-related stocks. Howard Silverblatt, chief index analyst at S&P Dow Jones Indices, the index calculation institution, analyzed that "Fab4 accounted for nearly half of the S&P 500 index's rise in the first quarter."