On February 13, shares of the American technology giant Amazon.com closed at $198.79 per share, giving the company a market capitalization of $2.1 trillion. This marked the ninth consecutive day of declines, the longest such losing streak since July 2006. Amazon.com's stock price has now fallen more than 23% from its recent peak, pushing it into a technical bear market. It has become the second member of the "Magnificent Seven" (Mag7) group of US stocks to enter bear market territory.
Microsoft was the first Mag7 constituent to fall into a bear market, with its stock price reaching that threshold on January 29. As of the close on the 13th, Microsoft's shares were down 27.8% from their recent high. Meta Platforms, Inc. may be the next Mag7 member to enter a bear market; as of Friday's close, its stock was down 19.6% from last year's peak, just 0.4 percentage points away from the 20% decline that defines a bear market. According to statistics, the combined market capitalization of the Mag7 has evaporated approximately $1.51 trillion (approximately 10.4 trillion Chinese Yuan) since the start of the year.
Concurrently, reports indicate that UBS Group and Goldman Sachs recently filed their Q4 portfolio reports (Form 13F) with the US Securities and Exchange Commission (SEC), covering holdings as of December 31, 2025. The reports revealed that both institutions significantly reduced their positions in several major US technology stocks. Notably, UBS Group sold off 10.042 million shares of NVIDIA, a reduction of 11.47%.
Recently, the trend of sector rotation in the US stock market has become increasingly pronounced. Technology giants like Amazon.com and Alphabet have announced substantial capital expenditure plans. Coupled with renewed investor concerns over new tools from Anthropic, this has led to a sell-off in many stocks related to artificial intelligence, with funds flowing into value stocks in other sectors.
Bank of America believes that since 2020, the market leadership of technology giants, exemplified by the "Magnificent Seven," is facing a "significant threat." With the US midterm elections approaching, investors should gradually shift their focus towards investing in small and mid-cap stocks.
Michael Hartnett, Chief Investment Strategist at Bank of America, stated that the massive capital expenditures by US tech giants on artificial intelligence signify that these behemoths "no longer possess the best balance sheets, nor can they execute the largest share buybacks." He added that the transition from a capital-light to a capital-heavy model "poses a major threat to the market leadership of big tech companies that has characterized the early 2020s."
However, many analysts remain optimistic about the market's prospects. Michael Wilson, Chief US Equity Strategist at Morgan Stanley, believes that supported by the artificial intelligence boom and strong revenue prospects for the tech sector, US technology stocks still have room for further gains. Valuations for tech stocks have moderated following recent market volatility. Simultaneously, the collective plunge in software stocks has created "highly attractive buying opportunities" for some stocks like Microsoft and Intuit.
Looking ahead, Wilson analyzed that the fundamental positive factors for the AI-enabled sector remain intact, and the investment value of companies related to AI applications is still underestimated. He suggested that companies applying AI to their core businesses, rather than those developing the underlying technology and infrastructure, possess greater opportunities.