Magnificent 7's stock market dominance under pressure?

To beat the market in recent years, many investors applied a simple strategy: Load up on the biggest US technology stocks. It paid handsomely for a long time. But last year, it didn't.

For the first time since 2022, when the Federal Reserve started raising interest rates, the majority of the Magnificent 7 tech giants-Nvidia, Microsoft, Apple, Meta Platforms, Alphabet, Amazon and Tesla-performed worse than the S& Index.

While the Bloomberg Magnificent 7 Index rose 25% in 2025, compared with 16% for the S&, that was only because of the enormous gains by Alphabet Inc. and Nvidia Corp. Many Wall Street pros see that dynamic continuing in 2026, as profit growth slows and questions about payoffs from heavy artificial intelligence spending rise. So far they've been right, with the Magnificent 7 index up just 0.5% and the S& climbing 1.8% to start the year. Suddenly stock picking within the group is crucial. "This isn't a one-size-fits-all market," said Jack Janasiewicz, lead portfolio strategist at Natixis Investment Managers Solutions, which has $1.4 trillion in assets.

Bloomberg