Magnificent 7 Stocks Falter: 5 Underperform Amid S&P 500's Strong Year

The Magnificent 7's Underwhelming Performance: A Shift in Investor Sentiment The S&P 500 futures were up 0.44% this morning, a day after the index lost 1.07% on Friday, a day that followed a new all-time high on December 11. Despite this, the index remains up 16% year-to-date, a performance that is above average for U.S. stocks. However, a closer look at the performance of the so-called "Magnificent 7" tech stocks reveals a concerning trend: only two of these stocks, Alphabet and Nvidia, have beaten the market as a whole, year to date. According to data from October 2022 to November 2025, approximately 75% of the gains in the S&P 500 came from this handful of companies. However, as the year draws to a close, the performance of these stocks is underwhelming. Alphabet, the parent company of Google, has seen its stock price rise by 63% year to date, while Nvidia has seen a 30.33% increase. In contrast, the other five members of the Magnificent 7 have underperformed the market: Tesla is up 13.65%, Microsoft is up 13.53%, Apple is up 11%, Meta is up 10%, and Amazon is up just 3%. This trend suggests that investors are picking between winners and losers in tech, rather than simply herding into the index or tech stocks as a whole. This shift in investor sentiment is likely a response to concerns about the impact of AI spending on tech stocks. As investors become more discerning, they are beginning to differentiate between companies that are truly driving innovation and those that are simply benefiting from the hype surrounding AI. One notable example of this trend is Oracle, which has seen its stock price rise by 14% year to date, but has declined by 42% from its high in September. Investors have been wary of the company's decision to take on extra debt at increasingly wider interest rates, which has led to a decline in its stock price. The Magnificent 7's underwhelming performance has significant implications for the tech industry as a whole. If investors continue to pick between winners and losers, it could lead to a more nuanced and informed approach to investing in tech stocks. However, it also raises concerns about the sustainability of the current market rally, which has been driven in large part by the performance of these seven stocks. In the coming year, it will be interesting to see how investors continue to allocate their assets in the tech sector. Will they continue to favor the winners, or will they begin to take a more diversified approach? Only time will tell, but one thing is certain: the days of simply herding into the Magnificent 7 are behind us.