MW Investors snap up stocks outside of the 'Magnificent Seven' in January

By Joy Wiltermuth

Companies outside of the megacap tech complex in January were on pace for outperformance

Investors counting on last year's big winners of the stock market to repeat their lead in 2025 have endured a turbulent end to January.

Several of the large tech giants known as the "Magnificent Seven" gave shareholders a shock after China's DeepSeek startup raised serious questions about potentially cheaper, less energy-intensive alternatives for harnessing artificial intelligence.

Nvidia Corp., $(NVDA)$ Microsoft Corp., $(MSFT)$ Alphabet Inc., $(GOOG)$ Amazon.com Inc., $(AMZN)$ Meta Platforms Inc. $(META)$ and Tesla Inc. $(TSLA)$ were each headed for gains on Friday, according to FactSet.

Apple Inc. $(AAPL)$ on Thursday delivered on its earnings, helping provide a lift to tech stocks. Still, two out of the "Magnificent Seven," namely Nvidia and Microsoft, were facing a weekly loss.

Read: Nvidia's CEO, whose chips play a key role in the DeepSeek drama, becomes latest corporate exec to pay a visit to Trump

Furthermore, when taking a market-cap weighted composite of those seven companies, versus the S&P 500's remaining 493 companies, the performance for the "Magnificent Seven" was -0.3% in 2025 through Thursday's close, but up 5% for the rest, according to a review by Dow Jones Market Data.

The gap could narrow based on Friday's tech bounce - and tech still clearly matters for U.S. equities. The biggest players in stocks, however, might start mattering a little less to investors going forward.

Goldman Sachs researchers found in a recent survey that 60% of respondents at their London strategy conference expected the other 493 companies in the S&P 500 to outperform better than the "Magnificent Seven."

Last year saw the "Magnificent Seven" contribute more than half of the S&P 500's performance, according to the Goldman researchers.

Yet while Meta's shares were heading for a record close Friday and a near 20% gain in January, the Roundhill Magnificent Seven ETF, MAGS which tracks the full group of seven tech giants, was up only about 4% on the year through Friday, according to FactSet.

That compares with a 5.6% gain for the blue-chip Dow DJIA so far in 2025. The tech-heavy Nasdaq Composite Index COMP was on pace for a 3.3% gain, while the S&P 500 was up 4% as of midday Friday.

Read: Why you should be wary of the 'most admired' companies

-Joy Wiltermuth

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January 31, 2025 13:09 ET (18:09 GMT)

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