I am hooked on a podcast called Acquired, in which two smart guys do a deep analytical dive, typically lasting three or four hours, on a single successful company such as Coca-Cola (KO) or Trader Joe's. Ben Gilbert and David Rosenthal, a pair of venture capitalists, are especially adept at explaining what's behind the success of such tech giants as Alphabet (GOOGL), the former Google, which recently merited 11 hours and 42 minutes of dialogue all by itself.
What have I learned? The big winners have a clear mission, they're adaptable, and they're willing to spend money on talent and take risks. They make astounding profits. Apple (AAPL), essentially a phone manufacturer, earned $112 billion in fiscal 2025 on $416 billion in revenues. Alphabet and Microsoft (MSFT) have even better profit ratios, and Nvidia (NVDA) is in a universe all its own, earning 75 cents for every dollar of sales for the nine months ending in October.
In 2018, Apple became the first U.S. company to achieve a market capitalization (shares outstanding times price) of $1 trillion. Now, 10 companies — eight of them in technology — are trillionaires, and Big Tech dominates the stock market in unprecedented fashion.
The Washington Post in November calculated that the Magnificent Seven — Alphabet, Amazon.com (AMZN), Apple, Meta Platforms (META), Microsoft, Nvidia and Tesla (TSLA) —had gained 1,057% since January 2019 while the remainder of the stocks in the S&P 500 Index rose 132%. (Stocks I like are in bold; prices and other data are as of November 30, unless otherwise noted.)
With the exception of Tesla, whose revenues have been flat for three years, these companies deserve their high valuations. The question now, with all of them investing so much in artificial intelligence, is whether their latest bets will pay off. Other than the chipmakers, no one is earning sizable profits from AI yet, and the companies are making massive capital investments — Alphabet projected it would spend up to $93 billion in 2025 and even more in 2026.
There are other risks, among them intense competition and increasing government intervention. Still, as an investor, you have no choice. You need to own some or all of the Magnificent Seven stocks, either individually or as part of an index fund (the seven represent 35% of the value of the S&P 500), or even through a managed mutual fund such as the Fidelity Contrafund (FCNTX), where the proportion tops 40%.
But, as I wrote a few months ago, don't expect a stock with a market cap of $4 trillion to sextuple. That would amount to half the value of all the homes in the U.S. Trying to find the next Microsoft or Meta is a fool's errand, but there are many other tech stocks out there that actually could sextuple and, even if they don't, are worth your attention.
My Magnificent-Seven-Plus strategy
Let's begin with robotics, the machines that AI can power to do the work of humans or of clunkier machines. Symbotic (SYM) makes AI-driven robotic warehouse automation systems for such retailing giants as Walmart (WMT) and Target (TGT). Revenues rose 26% in the year that ended September 30. Profits are still elusive, but this is a business that could take off.
A major success story is Intuitive Surgical (ISRG), whose shares have tripled since October 2022. Although its market cap is less than one-twelfth the size of Amazon's, the company is not small, and it was founded 30 years ago. Intuitive's widely adopted da Vinci robotic system helps physicians perform minimally invasive surgeries.
At the other end of the risk curve is Serve Robotics (SERV), which makes self-driving food-delivery robots. Both Nvidia and Uber Technologies (UBER) hold stakes in Serve, which went on a wild ride in 2025, falling from $23 to $5, then climbing back to $18 and now trading at about $10.
You can buy a bundle of robotics companies through the Global X Robotics & Artificial Intelligence ETF (BOTZ), an exchange-traded fund that also has a large interest in Nvidia, or through the ARK Autonomous Technology & Robotics ETF (ARKQ), which has returned an annual average of 33.8% over the past three years — more than 13 points better than the S&P 500.
Cathie Wood manages the ARK funds, and it's worthwhile hunting for tech treasures in the portfolio of her flagship ETF, ARK Innovation (ARKK). Among the top holdings is Shopify (SHOP), with a $207 billion market cap but lots of room to grow. The company seems to have cracked the code with a platform that helps businesses track inventory, process sales and fulfill orders.
Archer Aviation (ACHR), which makes vertical takeoff and landing aircraft, still has no revenue, but I am bullish on low-level aerial corridors for fast transportation, and I am encouraged that Wood has taken a serious stake. ARK also owns CRISPR Therapeutics (CRSP), a Swiss company whose gene-editing process for treating disease benefits from AI analysis of huge data sets.
A company with promise is Tempus AI (TEM), whose revenues rose 85% in the most recent quarter compared with a year ago. Tempus uses AI to analyze, diagnose and treat disease. The company's tools sequence a patient's genes and compare the results with others in a proprietary database.
The next step is to determine the success of drugs used to treat similar patients and even recommend current clinical trials. Tempus can also compare a patient's tumor with those in its own database and find the best historical treatments. Shares have nearly doubled in the past five years, and the company's market cap is now $14 billion.
Powering gains
At a time when the world needs more power to drive data centers and advanced manufacturing, a sudden interest in geothermal energy has emerged. Geothermal currently provides electricity and heat for a negligible portion of the country.
But innovations similar to fracking, which propelled natural gas, are making geothermal less expensive to develop, faster to deploy, and feasible for more states than California and Nevada, which currently account for 93% of geothermal generation.
Ormat Technologies (ORA), with a market cap of $7 billion, is the only vertically integrated company that's a pure play on the U.S. market. Shares have jumped 39% in the past year, but now is the time to get in on the ground floor — or, in this case, below it.
With my Magnificent-Seven-Plus strategy, you can own the Big Tech stocks individually or in funds, and then perhaps another seven smaller technology companies with the potential to benefit from AI and other innovations. If you do buy the stocks, be committed. They'll go up and down. Try to hold on.
James K. Glassman chairs Glassman Advisory, a public-affairs consulting firm. He does not write about his clients. Of the stocks mentioned here, he owns Amazon.com. His most recent book is Safety Net: The Strategy for De-Risking Your Investments in a Time of Turbulence. You can reach him at JKGlassman@gmail.com.
Note: This item first appeared in Kiplinger Personal Finance Magazine, a monthly, trustworthy source of advice and guidance. Subscribe to help you make more money and keep more of the money you make here.
