If you invested in all of the Magnificent 7 tech stocks in 2025, congratulations — your return for the year was well above the S&P 500. But if you invested in only five of them, your return might have lagged the broader stock markets.
Only two Magnificent 7 stocks — Alphabet (GOOGL) and Nvidia (NVDA) — outperformed the S&P 500 in 2025, Bloomberg reported. The five that fell short of the mark were Amazon (AMZN), Apple (AAPL), Meta Platforms (META), Microsoft (MSFT) and Tesla (TSLA).
It was the first time since 2022 that the majority of Magnificent 7 stocks performed worse than the S&P 500 index, according to Bloomberg. But thanks to the hefty gains of both Alphabet and Nvidia last year, the Bloomberg Magnificent 7 Index still rose by 25% in 2025 versus 16% for the S&P 500.
What should investors expect from the Magnificent 7 in 2026? Keep reading to learn more.
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Sluggish Start to the Year
As of Jan. 23, the CNBC Magnificent 7 Index is down slightly since the beginning of the year. In contrast, the S&P 500 is up about 1% for the year as of Jan. 23. The Dow is up 2% over the same time frame, while the Nasdaq is up 1.3%.
The Magnificent 7’s so-so performance could continue in future months as they deal with slowing profit growth and concerns about heavy artificial intelligence (AI) investments, according to experts.
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What Should Investors Expect?
Investors aiming to earn big profits off the Magnificent 7 this year might be disappointed if they look only at the group as a single entity rather than seven individual stocks.
Buying all seven “does not diversify you,” said Chad Cummings, an attorney and CPA at Cummings & Cummings Law who previously worked in finance and tax. Instead, it “just concentrates you in a single crowded trade,” he told GOBankingRates. “I see everyday investors treat the Mag 7 like a safety blanket, then act shocked when the same headline moves all positions at once.”
Jack Janasiewicz, lead portfolio strategist at Natixis Investment Managers Solutions, offered a similar take in a recent interview with Bloomberg. “This isn’t a one-size-fits-all market,” Janasiewicz said. “If you’re just buying the group, the losers could offset the winners.”
Leaders and Laggards
Nvidia and Microsoft seem to be best positioned for a strong run in 2026, according to many experts. “I would expect relative strength from Nvidia and Microsoft if enterprise AI spend stays funded,” Cummings said.
He also expects potential strength from Amazon and Alphabet “if cloud and advertising budgets hold up.” However, he sees Google’s ad revenue as a “major risk point” for Alphabet because of competition from AI as well as lower organic search traffic.
Among Nvidia’s biggest risks in 2026 are rising competition and “concerns about the sustainability of spending by its biggest customers,” per Bloomberg. Even so, the vast majority of analysts who cover Nvidia have “Buy” ratings on the stock.
As for the laggards, Cummings cites Apple and Tesla. “I watch Apple for upgrade fatigue and geopolitical whiplash that can disrupt the supply chain,” he said. “I also watch Tesla for brutal price competition, litigation and recall exposure, and policy reversals that can change the economics in a quarter.”
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This article originally appeared on GOBankingRates.com: The Magnificent 7 in 2026: What Should Investors Expect?
