The AI trade that bound the group’s stocks is coming apart, and most now trail the overall market.
The Magnificent Seven is now the Mag Five. Or is it the Fab Four? Investors are no longer grouping the market's big tech stocks together in quite the same way.
The fortunes of what was once Wall Street's favorite band of megacap names have diverged in the past year, as professional and ordinary investors alike take a more cautious view of the artificial-intelligence spending boom.
Only Alphabet and Nvidia outperformed the S&P 500 in 2025. And so far this year, five Mag Seven stocks are faring worse than the broader benchmarks. Money managers say the moniker -- which also includes Microsoft, Meta Platforms, Apple, Amazon and Tesla -- is no longer synonymous with stock-market stardom.
"The correlation has fallen apart," said David Bahnsen, chief investment officer at Bahnsen Group. "What they have in common is being trillion-dollar companies."
It is a sign that the AI trade has evolved since the raging bull market began, with traders now placing their bets more selectively than before. Some expect the benefits of artificial intelligence will spread to industries like healthcare; others are doubling down on the chip makers or the energy companies they expect to power the build-out.
"You're starting to see it broaden out," said Michael Hartnett, the Bank of America strategist who is credited with coining the Magnificent Seven moniker back in 2023. The name comes from the classic western movie featuring seven heroic gunfighters and their push to save a small town. "The next Magnificent Seven will be the megacap companies who can show that AI adoption is transforming their huge businesses," he said.
"Don't forget that in the film, only a few survive."
Individual investors, many of whom were loyal Mag Seven shareholders, have also started turning their attention to other parts of the market. These retail investors accounted for a significantly smaller proportion of overall trading volume in those seven stocks last year than they did in 2023 or 2024, according to Vanda Research.
Tesla, a longtime favorite of ordinary investors, has seen the biggest decline in retail activity. Average daily retail turnover dropped 43% in 2025 from the peak in investor interest two years before.
Hartnett said he initially grouped the stocks together based on their shared characteristics as huge, well-run companies that were dominant in the tech sector. But the AI arms race has been driving a wedge between members of the Magnificent Seven for some time.
Amazon, Alphabet, Microsoft and Meta are now the "hyperscalers" spending hundreds of billions to train new AI models, build data centers or expand cloud-computing capacity. Nvidia still dominates the market for the chips needed to power the most advanced AI models.
Meanwhile, the others are lagging behind. Apple shares trailed the S&P 500 index last year, when the iPhone maker faced criticism for spending less and losing ground to competitors on AI efforts. Tesla stock, once a market highflier, has vastly underperformed several of its Magnificent Seven peers as sales of its electric vehicles have slowed.
"They're all at different stages," said Michael Arone, chief investment strategist at State Street Investment Management. "The rising tide has lifted all boats, and now we're going to get to the winners and losers."
While they might be headed in different directions, each of the Mag Seven still has an outsize influence on the market. Together, they comprise roughly 36% of the S&P 500's market capitalization, according to Dow Jones Market Data.
Wall Street has left behind a winding trail of nicknames and acronyms that have long since gone out of style.
There was the Nifty Fifty, the group of industry-spanning stocks that gained popularity in the late 1960s. Then there was BRIC, which lumped together the emerging markets of Brazil, Russia, India and China, and WATCH, for retailers Walmart, Amazon, Target, Costco and Home Depot.
That is not to mention BAT (China's Baidu, Alibaba Group and TENCENT), FANG (a Mag Seven predecessor, made up of Facebook, Amazon, Netflix and Google parent Alphabet), FAANG (same group, but with Apple) and Granolas (a group of 11 big European companies, including GSK, Roche and Novo Nordisk).
The Magnificent Seven may have lost the reason investors had linked them in the first place. But for now, no other posse of stocks has come to take their place.
"There is not a suitable replacement yet," Arone said. "But I think there probably will be."
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