Are investors having second thoughts about the magnificent seven? Well, they’re still keen on Meta, which is up 20 per cent this year following a record 18-day winning streak, but five of the seven (Apple, Nvidia, Microsoft, Google and Tesla) are down in 2025.
Instead, the leaders in financial markets in 2025 have thus far been gold, European stocks, financials and healthcare stocks.
In January, the US technology sector lagged the S&P 500 by the widest margin since 2016, notes Morgan Stanley’s Lisa Shalett.
Hedge funds, she adds, are reducing exposure to mega-cap tech stocks for the first time in a year, while company insiders are selling shares at the highest rate since 2021.
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Investors share insiders’ wariness: Shalett notes larger companies are, on average, trading lower the day after reporting earnings. Periodic bouts of underperformance are perfectly normal, so it’s too early to say if this is a blip or the start of something more serious for big tech.
Still, after years of unquestioned dominance, investors may finally be asking whether the magnificent seven should continue to lead – or if it’s time to pass the baton.
