Much of the megacap tech group is enjoying a rally, says Fundstrat's Newton

The new foldable iPhone Duo is displayed during an Apple event at the Steve Jobs Theater in Apple Park in Cupertino, Calif., on Sept. 9, 2026. Apple shares have rallied back near record highs.

The "Magnificent Seven" basket of mega-tech stocks is on the verge of an imminent breakout that should spark a sharp rally in the large-cap tech sector, according to Fundstrat.

In a note published late Monday, Mark Newton, Fundstrat's head of technical strategy, presented the chart below to show that the Roundhill Magnificent Seven ETF MAGS is producing an ascending triangle "that is nearing resolution" and signaling a burst that could propel it to new highs.

The group of seven is made up of Alphabet (GOOGL), Amazon (AMZN), Apple (AAPL), Meta Platforms (META), Microsoft (MSFT), Nvidia (NVDA) and Tesla (TSLA). Together they command 31% of the S&P 500's market capitalization.

Source: Fundstrat

For many years, this batch of mega caps was treated somewhat as a block - a way to trade the best of American technology. That's despite the companies operating in different sectors. For example, Amazon was a retailer and cloud company; Apple a consumer-goods and services concern; Tesla made electric vehicles; and Meta was a social-media-driven ad-sales company.

However, for many months, the Magnificent Seven constituents diverged as different narratives drove share prices. For example, Tesla struggled amid slumping EV sales; Microsoft saw concerns that artificial intelligence would hurt software companies; and Meta's stock was damaged by fears that the benefit of its AI capex was hard to quantify.

But in recent weeks, many of those worries have receded. For example, investors have welcomed news that Meta is launching Muse, its personal AI agent, pushing the company's shares up 22% in a month. Fears about software disruptions have subsided, leaving shares of Microsoft, which is also making hay with its Azure cloud division, up 28% over the past three months.

The share-price performances of hyperscalers like Amazon and Alphabet have fluctuated due to sentiment over the AI boom. Lately, a more positive outlook has been pushing those stocks higher.

And Apple, which had been lagging on concerns that it was slow to set out its AI strategy, is now considered a winner by holding back on capex and its well-received launch last week of its foldable iPhone. Apple's shares are up 11% over the last three months.

Nvidia, the biggest of them all, has seen its shares gain 13% this year as the AI-chip maker continues to post forecast-beating earnings and guidance. Tesla is the notable underperformer, with shares down 20% in 2026. But that hasn't stopped the MAGS from gaining more than 4% over the past month.

"MAGS is on the verge of breaking out and looks quite positive here, with stocks like Apple, Alphabet, and Meta having all firmed up nicely in recent days," said Fundstrat's Newton.

"These look more appealing than many semiconductor names, many of which have stabilized but whose rally has proven to be a work in progress - not dissimilar to what happened to software earlier this year," he added.

The ETF looks very close to exceeding the 70.80 mark from Sept. 3, which should result in a sharp rally in the Nasdaq 100 and in large-cap technology over the next few weeks, according to Newton.

"While Nvidia and Amazon have both weakened ever so slightly in recent days, neither has shown sufficient technical deterioration to think these cannot rally back as the Magnificent [Seven] ETF breaks out - which I see as being imminent," he concluded.

-Jamie Chisholm