From hero to (sub)zero

The Magnificent 7 stocks, which were the biggest drivers of the S&P 500's performance last year, have now become its biggest drag. As of March 6th, the S&P 500 had declined by 2.4% year-to-date, while Apple, Amazon, Google, Meta, Microsoft, NVIDIA, and Tesla collectively lost 9.9% of their market capitalization. This implies that the rest of the S&P 500 has actually gained 1.5% in value.

From a fundamental perspective, we believe these companies have not experienced significant deterioration in 2025—perhaps with the exception of Tesla. Structural trends, such as AI, remain intact. What has changed is investor sentiment, particularly the valuation multiples they are willing to pay in an increasingly uncertain geopolitical and economic environment.

As long-term investors, with the Magnificent 7 now testing their 200-day moving averages, this could present an opportunity to revisit these tech giants for potential investments at more reasonable valuations.