Are Magnificent 7 Stocks Losing Steam In 2026?

The Magnificent 7 (Mag7) is the moniker given to a collection of influential companies on the US stock market that includes Alphabet, Amazon, Apple, Meta Platforms, Microsoft, NVIDIA, and Tesla.

The Mag7 collectively generated a roughly 18% return in FY2025 – a disappointment when compared with the 75% return it generated the year before.

Above: Magnificent 7’s volatile FY’25 journey.

But the more interesting story is not one of growth, but of the bipolar personality Mag7 embraced on the way there.

And while Mag7 endured bipolar swings (largely triggered by Trump’s policy announcements), the S&P did what it does best – smooth out the bumps to offer a less dramatic, yet satisfying, result.

Above: The typical S&P investor achieved the same result, but with fewer heart palpitations.

But the 18% figure is a distraction – because it’s an average figure – and averages are excellent at obscuring the true story.

The days of all 7 companies in this portfolio marching forward in unison appear to be over – at least for now.

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The playing field has split, with some straggling (Meta losing 30%), some plateauing (Microsoft, NVIDIA and Tesla failing to show meaningful growth) and some continuing to skyrocket.

Google, the darling of the group, recorded an eye-watering 80% rise – despite being caught flat-footed in the race for AI search domination a year earlier.

Magnificent 7’s Downside Risks Have Grown.

The phrase ‘Magnificent 7’ was coined in 2023 by Bank of America analyst Michael Hartnett, based on the dominance and extraordinary surge in the Mag7’s share prices.

Above: Growing divergence between gains made across the Magnificent 7. Zoom in to see performance across shorter timelines.

That year saw gains of over 200% by Nvidia, over 190% by Meta, and over 100% by Tesla.

But those gains seem like ancient history in 2026 – with investors regularly selling stocks due to:

Year-to-date in 2026, most Mag7 stocks are stagnant, with only Google and Amazon showing double-digit growth.

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Meta is the biggest loser of the year so far, with markets punishing Mark Zuckerberg for a failed Metaverse pivot, and frustration growing over the company’s AI spending plans.

You can learn more from our deep dives into Nvidia, Microsoft, Tesla and Apple.

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The $1T CAPEX Is Struggling To Show ROI.

Much of the hype surrounding the Magnificent 7 hinges on the idea that massive investments in datacentres and frontier models will eventually be recouped through the sale of AI tokens at scale.

This is a seductive idea, fuelled by out-of-this-world revenues of frontier models, with Anthropic alone adding $550 of ARR (Annual Recurring Revenue) every single day.

Curiously, the company’s revenue ladder looks more like an infection tracker near Wuhan, rather than the accounting ledger of a legitimate business:

This trend is about to clash head-on with the newly found fiscal conservatism amongst company CFOs and CEOs.

Rather than continuing with the frenzied free-for-all that was AI adoption in 2025, business leaders are cracking down. Bloomberg recently reported that the Tokenmaxxing era is dead after 68% of companies overspent their AI budgets last year.

Media’s obsession with the Mag7 is waning, too.

Just like the FAANG narrative captured imaginations back in 2018 and slowly died, the Mag7 appears to be following the same trajectory.

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Long-Term Success Of Mag7 Looking Shaky.

Belief in the transformative power of AI-enabled apps and devices underpins much of the frothiness we’re observing in the Magnificent 7 stocks.

However, the technology is still nascent, with only 17% of companies deploying agentic systems – and almost none reporting margin expansion at any meaningful scale.

Gartner’s hype cycle for agentic AI in 2026 indicates that we’re past the so-called ‘Peak of inflated expectations’ — which naturally leads into ‘The trough of disillusionment’.

Above: The AI race has fractured, with agentic profiles distributed along the adoption curve.

This is a particular risk for Nvidia, whose chips are in demand by many of the other Mag7 members – but it is most vulnerable to cascading losses, should AI’s lofty promises fail to materialise.

At the core of the risk is a series of interlinked, aggressive deals between the chipmaker and AI startups, which have helped support the development of new models and infrastructure buildouts.

For example, earlier this month Nvidia announced a $5B investment into Safe Superintelligence, the safety-focused AI startup co-founded by former OpenAI chief scientist Ilya Sutskever.

But Nvidia is also a significant backer of xAI (now SpaceX, Mistral, Anthropic and OpenAI) – all of which use the money to buy more Nvidia chips.

These “circular deals” worry investors because they can skew incentives and lead to bad decisions.

How to Buy Mag 7 Stocks In Australia.

You can use a full-service stockbroking firm or an online stockbroking app to buy US technology stocks from Australia.

But first, be aware of the differences between becoming a shareholder in a US-based company compared to investing on the Australian Securities Exchange (ASX), such as:

To buy Magnificent 7 stocks now, follow these steps:

1. Ensure Mag7 Stocks Match Your Investing Plan.

Buying any stock without an understanding of its purpose within your portfolio is unwise.

You need a plan for how you’ll deliver on your financial goals — which should be underpinned by clarity on your investing timeframe, your appetite for risk, and your ethical preferences.

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Picking the best growth stocks or ‘the next big thing’ is also notoriously difficult. That’s why passive investing in broad-based index funds has seen such a strong rise in popularity among retail investors.

With an index-based fund or ETF, you don’t need to pick winners—you gain from long-term rise in market values across a diversified basket of assets that are regularly rebalanced.

Speaking to a professional financial adviser can increase your confidence in making a decision about investing in Mag7 stocks or funds/ETFs that hold them. 

2. Choose A Great Stockbroking Platform.

The platform you use does matter, as they vary significantly in terms of pricing models, available markets/products, usability and feature sets.

Some apps are clearly designed for experienced traders with robust in-built analytics and broad trading options — while others simplify stock investing at a low cost. To buy Mag7 stocks, you’ll need a share trading platform with access to the NASDAQ stock exchange. 

We covered the pros and cons of 10 of the best share trading apps in Australia.

Look for ASIC-registered brokers to be safe. You can find the app’s Australian Financial Services (AFS) Licence number on their website, and verify it via ASIC Connect.

The process to sign-up for an account includes some additional KYC (Know Your Customer) details. You’ll be requested to share.

3. Add Money And Create An Order.

Once you’ve got an account set-up, purchase your stocks by taking these steps:

Mag7: A Wise Investment Right Now?

Traditional valuation metrics haven’t meant much when it comes to how investors have approached Magnificent 7 stocks in recent years, but caution may be creeping in.

Some analysts warn the Mag7 stocks are due to drop in value, and others say we haven’t yet seen prices peak.

If you’re investing for long-term gains, say to fund retirement in 10-20 years—consider how confident you are that the Mag7 will still dominate by then and deliver a solid return?

Jody