BIG NUMBER | 2 | The Sort-Of-Magnificent 7

Investors who cheered as valuations of the Magnificent 7 soared in recent years might be surprised to learn that most of those names have actually underperformed the broader market this year. As seen in the chart:

• Five of the seven stocks (Amazon, Apple, Meta, Microsoft, and Tesla) lag behind the S&P 500 index year-to-date.
• The two remaining stocks, Nvidia and Google, are outperforming the market in 2025.

Yes, the Mag 7 as a group is still ahead of the S&P 500 for the year. However, given both the relative underperformance of most of its components and the evolution of the AI investment theme, it’s worth considering whether the Mag 7 as we know it today is headed for a shake-up.

Consider, for example, two AI-focused companies reporting their earnings this week:

• Broadcom’s recent surge (up 70% YTD) means its market cap is now larger than Meta’s—making Broadcom the sixth-largest company in the index.
• Likewise, Oracle’s market cap nearly doubled at one point this year. Despite giving up much of those gains, the stock is up 32% on the year.

The upshot: The biggest players in the tech sector could shift during the coming months and years as the AI landscape changes.

That said, we think it’s also important for investors to look beyond the marquee names, as the top of the market shifts focus to broader participation and inclusion of AI across industries. Smaller-cap software and services providers that can help companies effectively use and scale with this new technology may be poised to benefit.

Additionally, select non-tech sectors, such as industrials, energy, and utilities, could stand to benefit from the AI trend because they help build out and support the rapidly expanding AI infrastructure. In our opinion, this trend remains underappreciated by many investors today.

Originally published December 10, 2025

By Mike Dickson, Ph.D.

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Nasdaq-100 is a stock market index made up of equity securities issued by 100 of the largest non-financial companies listed on the Nasdaq stock exchange. The Mag 7 Index tracks the performance of the “Magnificent Seven” stocks: Apple, Microsoft, Amazon, Alphabet, Nvidia, Meta Platforms, and Tesla. References to indices, or other measures of relative market performance over a specified period of time are provided for informational purposes only. Reference to an index does not imply that any account will achieve returns, volatility or other results similar to that index. The composition of an index may not reflect the manner in which a portfolio is constructed in relation to expected or achieved returns, portfolio guidelines, restrictions, sectors, correlations, concentrations, volatility or tracking error targets, all of which are subject to change. It is not possible to invest directly in an index. Information obtained from third party sources is believed reliable but has not been vetted by the firm or its personnel.

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