MW The 'Magnificent Seven' have never been this important to the stock market - and a big test lies ahead

By Emily Bary and Isabel Wang

The Magnificent Seven's combined market cap has surpassed $22 trillion, making up 37.4% of the S&P 500

The "Magnificent Seven" tech stocks are turning Wall Street into their own private party.

The stock market is getting ever-more reliant on the "Magnificent Seven," raising the stakes for a jam-packed week of technology earnings that could decide whether Wall Street's momentum has more room to run.

The so-called Magnificent Seven group of megacap tech companies - which includes Apple Inc. $(AAPL)$ , Microsoft Corp. $(MSFT)$, Google parent Alphabet Inc. $(GOOG)$ $(GOOGL)$, Amazon.com Inc. (AMZN), Nvidia Corp. (NVDA), Tesla Inc. $(TSLA)$ and Meta Platforms Inc. (META) - now makes up 37.4% of the S&P 500's weighting, marking the first time that the group has crossed above the 37% mark, according to Dow Jones Market Data.

As the biggest companies continued to get bigger, Magnificent Seven companies have added nearly $1.3 trillion in market capitalization over the past four trading sessions, bringing their combined market capitalization to over $22 trillion.

See: These 5 tech stocks could let you play earnings season like a pro

The market's heavy dependency on the biggest stocks is nothing new. The artificial-intelligence frenzy has helped stalwarts like Microsoft grow their market values, and Nvidia, which was hardly a household name a few years ago, has consistently been the largest company by market capitalization since June, having first achieved the title about a year earlier.

Don't miss: Microsoft just beat out Apple to join Nvidia in the elite $4 trillion club

Nonetheless, the fact that a handful of high-flying tech stocks have become so important to the market has been cause for concern in some corners, especially as AI has yet to deliver the sort of broad-based financial benefits needed to justify the massive capital outlays for AI hardware.

Unlike the Dow Jones Industrial Average DJIA, which is weighted by price, the S&P 500 SPX is weighted by market cap, meaning that the biggest companies have outsize impact and funds tracking the benchmark index are also levered to the performance of Big Tech.

The market is therefore facing a big test this week, with Microsoft, Meta, Alphabet, Apple and Amazon due to post September-quarter results.

"Things could get spooky... if mega caps disappoint ahead of Halloween with valuations near historic highs for many," Joe Mazzola, the head trading and derivatives strategist at Charles Schwab, said in emailed comments earlier this week. While he thought the mega-cap tech players were in a good position to beat expectations, "it matters by how much, along with guidance and capital-expenditure plans."

Nonetheless, DataTrek analysts recently offered what they viewed as comforting data points around Big Tech trends. Lumping Broadcom Inc. $(AVGO)$ in with the Magnificent Seven names, they calculated an aggregate net margin of 27.4% during the first half of the year, well above the S&P 500's 12.7%.

"It is easy to look at the valuations of the Magnificent Seven plus Broadcom and wonder when the bubble will burst on these names, but once you start looking at their fundamentals some of that worry inevitably subsides," DataTrek cofounder Nicholas Colas said in a Monday report. "As a group, they enjoy both very high net margins and impressive scale and scope in their respective businesses."

To be sure, Big Tech earnings are not the only events likely to move the stock market this week, as investors are already fixated on the Federal Reserve's interest-rate decision on Wednesday afternoon - coming just hours before the tech earnings kick off.

While the Federal Open Market Committee is widely expected to lower policy rates by another quarter-point to a range of 3.75% to 4%, investors are watching closely to see how the decision will be made in the absence of most official economic data.

But still, the weight of mega-cap tech can't be overstated, said Louis Navellier, chairman and founder at Navellier & Associates. "They must not disappoint for the positive momentum to continue," he added.

U.S. stocks finished higher on Tuesday, with the three major indexes notching fresh all-time closing highs. The Dow DJIA rose 0.3%, while the S&P 500 SPX was up 0.2% and the Nasdaq Composite COMP advanced 0.8%, according to FactSet data.

-Emily Bary -Isabel Wang

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October 28, 2025 16:46 ET (20:46 GMT)

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