The Magnificent Seven trade, once the simplest bet on Wall Street, has splintered. Five of the seven mega-cap tech stocks that dominated markets for years have underperformed the S&P 500 since the start of 2025, leaving only Nvidia and Alphabet, Google’s parent company, carrying the torch for Big Tech outperformance.
The S&P 500 returned 16.4% for 2025. Alphabet crushed that with a roughly 65.4% gain, while Nvidia posted approximately 38.9%. The other five members of the club, Apple, Microsoft, Amazon, Meta Platforms, and Tesla, all failed to keep pace with the broader index.
The great divergence
The term “Magnificent Seven” was coined by Bank of America analyst Michael Hartnett to describe the group: Apple, Microsoft, Nvidia, Amazon, Meta Platforms, Alphabet, and Tesla. These seven stocks collectively represent approximately one-third of the S&P 500’s total market capitalization.
When a third of the index’s weight is spread across just seven names, the performance of those names disproportionately shapes the experience of anyone holding a passive S&P 500 fund. And when five of those seven are dragging, the math gets uncomfortable.
