MW Is the 'Magnificent Seven' over? Focus on these three stocks in particular.

By Emily Bary

As Big Tech stocks start to trade more on idiosyncrasies than broad euphoria, Citi says Nvidia, Microsoft and Apple become especially important to the stock market

Microsoft's large size makes it particularly influential in a more "idiosyncratic" market, according to Citi.

Investors are getting more selective when it comes to large technology stocks. That has implications for the broader market.

"Essentially, we argue that the days of the 'Magnificent Seven' as a tradeable cohort are mostly behind us," Citi strategist and managing director Scott Chronert said in a note to clients late Friday. "Instead, the markets are weighing in that the individual components of the group are increasingly trading on their idiosyncratic fundamental setups as related to AI and other company specific influences."

The trend is worth monitoring even for investors not so preoccupied with the Big Tech trade, because the largest technology stocks have an outsize impact on the S&P 500's SPX performance. The Magnificent Seven together account for about 35% of the S&P 500 by weight, he noted, and when you add Broadcom Inc. $(AVGO)$ to the bunch, that gets you to about 38%.

Read: This surprising stat could be a bullish signal for Big Tech stocks

Chronert looked at the divergent performances of "Magnificent Seven" stocks so far this year. Alphabet Inc. $(GOOG)$ $(GOOGL)$ and Nvidia Corp. (NVDA) shares have been bright spots, rising 58% and 33%, respectively. But Tesla Inc.'s stock $(TSLA)$ is down on the year, while shares of Amazon.com Inc. (AMZN) and Meta Platforms Inc. (META) are barely positive, lagging the S&P 500's 12% gain.

Chronert also examined ratios of price-to-earnings-to-growth for the Magnificent Seven stocks, looking at estimates going out two years. Those are "lower in most cases than at the start of the year," he added, with the notable exception of Alphabet, which has been the beneficiary of a dramatic shift in investor sentiment. As Chronert put it, "confidence in its structural positioning has improved."

See more: These two 'Magnificent Seven' stocks could be the strongest survivors of an AI apocalypse

But Nvidia "easily" has the lowest price-to-earnings-to-growth ratio of the bunch, at less than 1x, he flagged. That trend "speaks to the underlying lack of conviction in the longer-term sustainability of the current AI infrastructure spend cycle," according to Chronert.

So what does this all mean for investors broadly? Focus on the biggest of the big, according to Chronert, especially as "the hyperscaler enigma of proving return on investor is likely to persist into 2026 and beyond."

He said Nvidia, Microsoft $(MSFT)$ and Apple $(AAPL)$, which together make up about 20% of the S&P 500's market capitalization, will "probably become the most important underlying bellwethers for the megacap growth trade from here."

Don't miss: Why the once-invincible Nvidia can't save the AI trade

-Emily Bary

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November 24, 2025 08:44 ET (13:44 GMT)

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