The Magnificent Seven: What They Are, How They Performed in 2025, and Which Will Be the Best in 2026?

TradingKey - The Magnificent Seven refers to the seven best tech stocks in 2023. These are Apple (AAPL), Microsoft (MSFT), Alphabet (GOOG) (GOOGL), Amazon (AMZN), Nvidia (NVDA), Meta Platforms (META), and Tesla (TSLA). These technology titans are developing products related to Artificial Intelligence, Cloud Computing, online advertising, mobile devices, and Electric Vehicles, which has caused the Magnificent Seven’s weight to swell significantly as a share of the S&P 500 index.

Investors are likely to have an allocation in these companies through investment funds and ETFs that hold a high concentration in Mega-Cap growth. For example, the Vanguard Mega Cap Growth ETF has approximately 51% of its portfolio invested in the Magnificent Seven, clearly demonstrating how these companies are leading the direction of the market. The Magnificent Seven companies operate using similar technologies but are using them differently to make up their product mix. However, all seven companies share the ability to have the size and cash flow that allow them to invest at levels that very few others can compete with.

How the Magnificent Seven Performed in 2025

Returns among individual companies were mixed in 2025, and return dispersion was the primary contributor to returns as opposed to any shorter-term factors. The best big tech performer by far was Alphabet, whose stock gained well over 60% by the end of 2025, as it pulled ahead in the generative AI race with Gemini and addressed earlier regulatory concerns surrounding its search. This multiple expansion was led by a mixture of better sentiment and stronger execution that gave investors the ability to look through the noise around headline risk and focus more on the underlying core-business performance of risk.

Nvidia delivered another stellar year, as the surging demand for its GPUs for data center use by cloud providers and enterprises running AI training and inference continues. Nvidia’s more recent architectures had started shipping at scale and supply has remained tight relative to customer orders. While the exuberance that lifted up the share prices of both Nvidia and the broader semiconductor sector cooled, the underlying business of Nvidia has remained strong, supported by an unprecedented level of Capital Expenditure among Hyperscale customers. For a lot of investors, Nvidia was the best way to play the overall AI Infrastructure trend.

With shares up approximately fifteen percent, Microsoft enjoyed an excellent year in 2025, due primarily to its leadership in the fast-growing cloud computing space and its partnerships with various artificial intelligence companies that helped drive the growth of Azure; furthermore, continuous improvements to its productivity softwares through the introduction of AI-based features facilitated Microsoft’s continued success during 2025. Investors viewed Microsoft not as a high-flying stock due to momentum trading, but rather as a steady, dependable compounder, fittingly so for a year in which consistently executed businesses were rewarded by investors more so than were businesses based solely on speculative forecasts.

Amazon experienced poor performance relative to other stocks in the same sector with regard to stock price appreciation (up only 2%-4% annually), however, its underlying business performance was much better than the market perceived. The business generated more revenues and profits, increased sales of its advertising services, and experienced a resurgence in the revenue growth rate of its AWS segment. Unfortunately, ambiguity surrounding management’s cloud guidance, potential misalignment between Amazon’s cloud versus artificial intelligence business environments and competing faster-growing artificial intelligence businesses kept a lid on investors’ enthusiasm for Amazon. The wide divergence between improvements in performance by Amazon’s underlying business versus that of the stock price should have an impact on investors in the year ahead, 2026, than in the past year, 2025.

Meta Platforms got off to a good start in the year, benefiting from 26% revenue growth as AI boosted ad performance and engagement. The stock, however, retreated after the company provided guidance for greater capital expenditures relating to Data Centers and AI Infrastructure. The market wanted more obvious short-term returns from that spending. That wasn’t to say the advertising core engine remained healthy, and the company still found ways to embed AI more deeply in its products which could pay off as cost and efficiency gains mature.

Tesla faced a tougher 2025. Profit margins were squeezed by vehicle pricing and cost absorption, and diluted EPS declined on stable revenue.As EV incentives shifted, the consumer price-value relationship became more volatile, and the stock readjusted to the headwinds. The company’s software roadmap, which includes autonomous features, was still viewed as a swing factor, but Tesla shares were challenged to find lasting momentum during the year.

Apple lagged as well. Slower growth in revenue since 2022 and premium valuation meant less room for error. While the company added AI features to its devices, shareholders cast around for a new growth engine beyond the existing hardware cycle. The result was a stock that underperformed the stronger AI play in 2025 as investors sought more obvious catalysts.

Why Alphabet Stole the Show in 2025

Alphabet delivering the goods in 2025 was a matter of both capability and confidence changing. The company made tangible progress with Gemini, which helped close the perception gap in Generative AI and buttressed use cases across Search, Cloud, and productivity tools. At the same time, the lack of any really destabilizing regulatory headline allowed investors to focus again on the enduring strength of Google Search, as well as the growth opportunities presented by YouTube and Google Cloud. The better technology story, combined with fewer external concerns, allowed for earnings quality to emerge. When a company like Alphabet with big margins and cash flow starts to accelerate and become less risky, the stock price often reacts fairly quickly. So in that spirit, it’s perfectly fair to say that GOOG was the best of the Magnificent Seven in 2025.

How the Rest Stack Up in 2026

Nvidia will remain at the top of AI infrastructure spending activity, with its hardware and software innovations continuing to drive growth. There is still a significant opportunity for Nvidia to leverage data centre developments for many years. 

Microsoft seems like the safest long-term play, with strong and steady growth coming from a long-term moat created by its bets in AI in Cloud and enterprise software; it showed it could do this and then some, with consistently strong aggregate performance, and without emerging share prices buffeted by large shocks over the last five years.

In contrast, despite strong operating units, such as online resellers and AWS, Amazon’s stock price remained depressed; perhaps these benefits will be enjoyed further down the road if it does well at executing.

Meta Platforms Inc (Facebook/Instagram) had excellent growth from its core businesses while investing in new technologies; the longer-term benefits resulting from better engagement and advertising efficiency from innovative AI-driven advertising capabilities will offset any current downside resulting from operational expenses and slower Facebook sales. 

Tesla had strong efficiencies and margins compared to other manufacturers in its latest 12-month period, but the level of future returns will depend significantly upon software solutions and how well the company executes in pursuing autonomous vehicle solutions. 

At this stage, the "big" challenge for Apple Inc is how to generate new revenue streams (or new growth legs) from the strength of its existing ecosystems.

What Investors Should Do?

The most important conclusion from 2025 is that grouping these companies together hides substantial divergences in growth drivers, capital needs, and valuations. Alphabet came out as the best-performing stock for the year by nailing it in AI while alleviating concerns in other areas; and Nvidia, Microsoft, and Meta demonstrated that AI tailwinds aren’t a one-size-fits-all and can be long-lasting when supported by product-market fit.Amazon’s modest share increases in 2025 did not fully reflect improving business trends, which might carry more weight in 2026 if momentum in cloud and advertising continues. Tesla and Apple had more challenging benchmarks and less room for error, and their 2025 results showed the truth of that.

Those investors who want a simpler route can get plenty of the theme through a diversified vehicle with heavy exposure to the magnificent seven without hopping on a single winner. If you opt to select names, a peek at how AI, cloud, advertising, hardware and software play out within each company can provide a guidepost as to what should be realistic. In 2025, Alphabet was heads above the rest. Beyond 2025, the variation in this group is a nudge to fit your time horizon/risk tolerance to the underlying business you own – nvda for AI infra, msft for enterprise software, goog for search and cloud, tsla for the ev and autonomy story.