The magnificent seven are back – or are they?
Well, kind of. After trailing the S&P 500 for much of 2025, the much-hyped mega-cap grouping has recently surged ahead, buoyed by strong gains for Tesla, Nvidia, Apple, and Microsoft, each up 10 to 25 per cent over the past month.
The “kind of” qualifier reflects that only four of the seven – Nvidia, Alphabet, Microsoft and Meta – have actually outperformed this year.
Still, the US remains “a tale of two markets”, notes Schwab’s Liz Ann Sonders. The S&P 500 and Nasdaq trade at all-time highs, but most stocks have lagged.
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Just 10 per cent of S&P 500 members and 5 per cent of Nasdaq stocks are at 52-week highs, compared with broader participation last year.
Concentration at the top is “extreme,” says Sonders. The 10 largest S&P 500 stocks account for more than 40 per cent of the index’s value, the five largest over 25 per cent – both above peaks in 2000 and 2022.
As for the magnificent seven, they now make up 34 per cent of market capitalisation but only 27 per cent of earnings – a gap that’s widened since April and one to watch “as we head into earnings season”.
