Can the Magnificent Seven Ride Again?
After serving as the driving force for a blistering market rise, the so-called Magnificent Seven have taken an epic stumble in 2025.
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What goes up must come down. And what goes down… well, some are hoping they – all seven of them – must go back up again.
After serving as the driving force for a blistering market rise in 2023 and 2024, the so-called Magnificent Seven — that’d be Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia, and Tesla — have taken an epic stumble in 2025, shedding some $2 trillion in market value. In fact, the once mighty cohort is now trading at levels not seen since ChatGPT kicked off an AI frenzy. So the question remains: Can the Magnificent Seven ride again?
How Low Can You Go?
Between the DeepSeek moment, trade war uncertainty, and the threat of stagflation, there’s no shortage of reasons for the Mag 7’s tumble. And yet, not all the members’ falls from grace are equal. Microsoft has technically been the best of them, with share prices skidding by “only” 12% so far this year (still worse than the S&P 500’s roughly 10% slide). Tesla, meanwhile, facing weakening demand for its electric vehicles (while Chinese competitor BYD makes major breakthroughs), is the least magnificent among them.
Tesla’s share price has tumbled 36% year-to-date and nearly 50% since a December high. Crucially, its price-to-earnings ratio now sits at around 118x, compared with just about 35x at the end of 2022 (the start of the AI frenzy) and 70x at the end of 2023. Sans Meta, every other member of the group is trading below its pre-ChatGPT price-to-earnings ratio. Meta is trading at a somewhat more conservative 22x ratio, above its pre-ChatGPT level but roughly in line with the rest of the class).
Which may be why, moving forward, some investors don’t see the group as moving in unison:
- “I would say it’s more like the Mag Five for us,” Siebert Financial investment chief Mark Malek told CNBC last week, noting that Tesla and Apple are the two to be left out for now.
- “As a stock picker, I would actually go one by one… There are opportunities,” Nelson Yu, head of equities at AllianceBernstein, told CNBC.
Seven’s a Crowd: Need more evidence of the group’s waning importance? In a Bank of America survey last week, fund managers flagged gold — which has surged in value so far this year — as the most crowded trade on Wall Street. It’s the first time in two years that managers named an asset other than the Magnificent 7 as the most crowded trade.
