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The Sort-Of-Magnificent 7

Mike Dickson, Ph.D.
Mike Dickson, Ph.D.

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Five of the “Mag 7” tech stocks are lagging the broader market


Is a shift underway among today’s tech titans?

Investors who cheered as valuations of the Magnificent 7 soared in recent years might be surprised to learn that most of those names have actually underperformed the broader market this year. As seen in the chart:

  • Five of the seven stocks (Amazon, Apple, Meta, Microsoft, and Tesla) lag behind the S&P 500 index year-to-date.
  • The two remaining stocks, Nvidia and Google, are outperforming the market in 2025.

Magnificent 7 Year to Date Returns

Bloomberg, calculations by Horizon, data as of 12/08/2025. Past performance is not indicative of future results. This is not a recommendation to buy or sell any security. Indices are unmanaged and do not have fees or expense charges, both of which would lower returns. It is not possible to invest directly in an unmanaged index. Please see attached disclosures.

Yes, the Mag 7 as a group is still ahead of the S&P 500 for the year. However, given both the relative underperformance of most of its components and the evolution of the AI investment theme, it’s worth considering whether the Mag 7 as we know it today is headed for a shake-up.

Consider, for example, two AI-focused companies reporting their earnings this week:

  • Broadcom’s recent surge (up 70% YTD) means its market cap is now larger than Meta’s—making Broadcom the sixth-largest company in the index.
  • Likewise, Oracle’s market cap nearly doubled at one point this year. Despite giving up much of those gains, the stock is up 32% on the year.

The upshot: The biggest players in the tech sector could shift during the coming months and years as the AI landscape changes..

That said, we think it’s also important for investors to look beyond the marquee names, as the top of the market shifts focus to broader participation and inclusion of AI across industries. Smaller-cap software and services providers that can help companies effectively use and scale with this new technology may be poised to benefit.

Additionally, select non-tech sectors, such as industrials, energy, and utilities, could stand to benefit from the AI trend because they help build out and support the rapidly expanding AI infrastructure. In our opinion, this trend remains underappreciated by many investors today.

S&P 500 is a stock market index tracking the stock performance of 500 leading companies listed on stock exchanges in the United States. The Mag 7 Index tracks the performance of the “Magnificent Seven” stocks: Apple, Microsoft, Amazon, Alphabet, Nvidia, Meta Platforms, and Tesla.

References to indices, or other measures of relative market performance over a specified period of time are provided for informational purposes only. Reference to an index does not imply that any account will achieve returns, volatility or other results similar to that index. The composition of an index may not reflect the manner in which a portfolio is constructed in relation to expected or achieved returns, portfolio guidelines, restrictions, sectors, correlations, concentrations, volatility or tracking error targets, all of which are subject to change. It is not possible to invest directly in an index. Information obtained from third party sources is believed reliable but has not been vetted by the firm or its personnel.
This commentary is written by Horizon’s asset management team. Past performance is not indicative of future results. Nothing contained herein should be construed as an offer to sell or the solicitation of an offer to buy any security. This report does not attempt to examine all the facts and circumstances that may be relevant to any company, industry, or security mentioned herein. We are not soliciting any action based on this document. It is for the general information of clients of Horizon Investments, LLC (“Horizon”). This document does not constitute a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual clients. Before acting on any analysis, advice, or recommendation in this document, clients should consider whether the security in question is suitable for their particular circumstances and, if necessary, seek professional advice. Investors may realize losses on any investments. Asset allocation cannot eliminate the risk of fluctuating prices and uncertain returns. All investing involves the risk of loss.
The investments recommended by Horizon are not guaranteed. There can be economic times when all investments are unfavorable and depreciate in value. Clients may lose money. This commentary is based on public information that we consider reliable, but we do not represent that it is accurate or complete, and it should not be relied on as such. The opinions expressed herein are our opinions as of the date of this document. These opinions may not be reflected in all of our strategies. We do not intend to and will not endeavor to update the information discussed in this document. No part of this document may be (i) copied, photocopied, or duplicated in any form by any means or (ii) redistributed without Horizon’s prior written consent. Forward-looking statements cannot be guaranteed. Other disclosure information is available at www.horizoninvestments.com.
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