The Magnificent 7 are falling apart, and Wall Street needs new players to fill the gap. That’s the state of things right now, as the top seven tech names—Microsoft, Apple, Alphabet, Tesla, Amazon, Nvidia, and Meta Platforms—fail to carry the market the way they did in the past.
According to CNBC, their equal-weighted fund, the Roundhill Magnificent 7 ETF (MAGS), has already dropped 17% this year. That’s more than twice the S&P 500’s loss of just under 7%.
The drop in performance has also cut into their share of the S&P 500. In early January, the Mag 7 held a 34% weighting in the index. That number is now down to 29%, based on data from Todd Sohn, an ETF strategist at Strategas.
Todd said, “Index concentration has cooled for the moment, and along with this, so have Tech sector flows.” His note to clients on Thursday pointed to a shift in where investor money is going—away from tech, toward other sectors.
The power each of these stocks holds in the S&P 500 comes from their market caps. So when they shrink, their influence shrinks. That means if they’re not doing well, they can’t drag the index up anymore. Even with some good news from names like Netflix, the whole group isn’t doing enough.
Netflix crushed expectations on earnings. Tesla, despite missing estimates, still managed to rise for three straight sessions. Both Amazon and Nvidia insisted this week that the demand for AI data center is holding steady.
Still, all that didn’t push the S&P 500 back past the 5,500 level. That resistance held firm on Thursday, even though tech names tried to give the market a little push. But investors are still nervous about tariffs and a wider slowdown. That fear’s heavier than any short-term bounce.
Other sectors fall while Mag 7 underperforms
The picture outside of Big Tech doesn’t look much better. Sean Simonds, a strategist at UBS, sent a note Thursday saying, “Sales and earnings expectations (+5% and +10%, respectively) are moving lower in virtually every sector.” Sean said the worst hits are in consumer discretionary stocks.
That includes cars and household goods—areas that are getting beat up by tariff effects. Those stocks are now underperforming the rest of the market by 20%.
This means even if the Mag 7 can’t carry the weight anymore, there aren’t many sectors ready to step in. Wall Street is stuck, trying to rally with no one leading.
Later Thursday evening, S&P 500 futures gained a small bump of 0.3%. Nasdaq-100 futures moved up 0.4%, while Dow Jones Industrial Average futures didn’t move much at all. That little boost followed Alphabet’s Q1 earnings report. The company beat on both revenue and profit. In after-hours trading, its stock went up around 5%.
Not every name in tech had a win. Intel disappointed. After giving investors weak guidance and saying it would slash spending on operations and capital, the stock crashed over 5% in extended hours.
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