In recent years, the tech giants known as the Magnificent Seven have been the toast of Wall Street.
Between 2015 and 2024, the seven stocks collectively earned an eye-popping 698%, nearly four times the return for the S&P 500 as a whole, according to The Motley Fool.
Lately, though, the seven’s performance has looked positively pedestrian.
In the first half of 2026, Vanguard reports, the Magnificent Seven actually declined in value, losing 1% in a span that saw the S&P as a whole rise by 9%.
The Magnificent Seven used to move more or less in lockstep, mostly going up. Now, they're scattered across the proverbial prairie:
- Chipmaker Nvidia is up roughly 18% on the year, as of Aug. 18.
- Apple, maker of the Mac and iPhone, is up 14%.
- Amazon, the e-commerce giant, is up 13%.
- Alphabet, holding company for Google, is up about 10%.
- Microsoft, the firm behind Windows, is basically flat for the year.
- Meta, parent of Facebook, is down 17%.
- And Tesla, the EV automaker, is down 25%.
“There’s only one Mag-7 that’s beating the market this year. It’s Nvidia,” said Chris Grisanti, chief market strategist at MAI
Capital Management. Only Nvidia has reaped returns well beyond the S&P, which is up roughly 12.5% this year.
“The Magnificent Seven came together for a period of time,” Grisanti said, “and now they’re separating.”
Here's how the Magnificent Seven got their name
The seven saw dramatic growth over the past decade, and all rank among the world’s largest companies by market value.
Bank of America analyst Michael Hartnett coined the term Magnificent Seven in 2023 to encompass the tech giants, a group that powered a phenomenal run on the U.S. stock market.
Apart from being hot stocks, however, the seven never had that much in common. Amazon sells consumer products. Google is a search engine. Meta dominates social media. Microsoft makes software. Tesla makes cars.
If the Magnificent Seven moniker ever really fit, Grisanti said, maybe its time has passed.
“I think that’s a useful term only in the rearview mirror now,” he said.
Some Magnificent Seven stocks have shed value
Various Magnificent Seven stocks have shed value for myriad reasons. Tesla plummeted in 2025 as CEO Elon Musk plunged into politics as a controversial adviser to President Donald Trump. Microsoft sank this year amid a broader decline of software stocks. Meta has swooned as the company fights litigation alleging that the firm seeded addictive behavior in children.
A broader narrative suggests investors are questioning the massive AI investments by the Magnificent Seven, and particularly by the AI “hyperscalers,” a group said to include Alphabet, Amazon, Meta and Microsoft. Together, the firms are spending more than $700 billion this year on AI infrastructure.
“At the end of the day, the bill will come due,” said Roger Aliaga-Díaz, global head of portfolio construction at Vanguard. “And what investors will start asking in earnings calls is, ‘Is all the money you spent going to pay off?’”
Those firms are competing for memory chips and electrical capacity to expand AI. Prices are rising for those items, and some investors are bailing on Mag-7 stocks in favor of the companies that supply them.
Is the Magnificent Seven's run nearing its end?
Throughout the Seven’s tremendous run, stock analysts have debated how long it might last.
Vanguard, among others, predicted in 2025 that the Magnificent Seven would rise only modestly in value over the next decade. The key reason: Most of the seven stocks were overpriced.
Economists measure the value of a stock by a formula called cyclically adjusted price-to-earnings ratio. It tells you, in effect, whether the stock is overvalued or undervalued.
Right now, the CAPE ratio for the S&P 500 stands at 42.35. That means stock prices are very expensive, relative to earnings.
Most of the Magnificent Seven stocks have higher price-to-earnings ratios than the market as a whole. In other words, they are relatively overpriced.
Stock forecasters are also concerned about market concentration. Together, the Mag-7 make up 34% of the value of the S&P 500, according to a Motley Fool analysis. Back in 2015, by contrast, the seven represented only 12% of the S&P.
"The U.S. market overall has become very top-heavy," said Philip Straehl, chief investment officer, Americas, for Morningstar Wealth.
Concentration is the opposite of diversification. Investors are told not to hold only stocks, and not to hold too much of any one stock.
Perhaps unwittingly, a casual investor who tries to diversify with a S&P 500 index fund is staking a third of their investment in the Magnificent Seven.
“You’re buying into the S&P 500 to diversity, right? But you still end up with this very specific group,” said Anders Bylund, contributing media and technology analyst at Motley Fool.
Here are tips for diversifying beyond the Magnificent Seven
Fortunately, there are other ways to diversify. Here are a few places to look:
- Value stocks. A value stock is a good deal, basically, trading at a relatively low price relative to sales and earnings. Vanguard expects value stocks to rise by 6.4% to 8.4% a year over the next decade.
- Small-cap stocks. Small-cap stocks are shares in smaller companies. Vanguard predicts small-cap stocks will rise 4.7% to 6.7% annually over the next 10 years.
- Non-U.S. stocks. Foreign stocks beat U.S. stocks in 2025, and many analysts still consider them a good bet in 2026.
Bylund and other analysts are not suggesting investors should sell all their shares in the Magnificent Seven. Motley Fool still lists Amazon, Alphabet and Apple among its top 10 stocks to buy and hold.
But market forecasters may be less likely in the future to romanticize the Mag-7, like the gunfighters in the namesake 1960 movie, riding off together into the sunset.
Bylund jokingly urges investors to remember the ultimate fate of the seven in the film: “Four of them die by the end.”
This article originally appeared on USA TODAY: The Magnificent 7 are struggling. Don't let them sink your 401(k)
