Magnificent 7 Trade Is Broken — Here’s Where Smart Investors Should Look Next

2 months ago 46

Rich Duprey

Sun, July 26, 2026 astatine 10:24 AM CDT 5 min read

Quick Read

The MAGS ETF returned 158% since its April 2023 motorboat but has fallen 4% successful 2026 portion the S&P 500 gained 8%.
Alphabet, Amazon, Meta, and Microsoft basal retired for combining beardown currency flows with AI monetization, portion Tesla and Apple look steeper maturation questions.
Buying the Magnificent 7 arsenic a azygous handbasket nary longer makes sense, arsenic each banal sits astatine a antithetic signifier of turning AI spending into profit.
Don't wait: the expert who called NVIDIA successful 2010 conscionable revealed his apical 10 AI stocks. See the afloat database FREE now.

The artificial quality roar reshaped the banal marketplace faster than astir immoderate investing inclination successful caller memory. When OpenAI released ChatGPT successful precocious 2022, investors rapidly realized AI wasn't different speculative exertion communicative -- it was becoming the adjacent computing platform.

A close-up changeable of a person's hands holding a acheronian grey smartphone. Overlaid connected the country is simply a translucent bluish rectangular surface displaying a fiscal graph with some enactment and barroom charts against a grid. Above the graph is simply a ample greenish upward arrow with the connection 'BUY', and beneath it is simply a ample reddish downward arrow with the connection 'SELL'. The inheritance is blurred, focusing connected the hands, phone, and integer interface.

Capital flooded into the fistful of companies with the chips, unreality infrastructure, software, and equilibrium sheets needed to marque AI a reality. Those 7 companies -- Apple (NASDAQ:AAPL), Microsoft (NASDAQ:MSFT), Nvidia (NASDAQ:NVDA), Amazon (NASDAQ:AMZN), Alphabet (NASDAQ:GOOG), Meta Platforms (NASDAQ:META), and Tesla (NASDAQ:TSLA) -- became known arsenic the Magnificent 7.

Yet the nickname wasn't primitively a compliment. It was a informing that conscionable 7 stocks were liable for an outsized stock of the S&P 500's gains. Three years later, the marketplace has go overmuch broader, leaving investors to determine whether buying the radical arsenic a full inactive makes sense.

From Market Leadership to Market Laggard

The Roundhill Magnificent Seven ETF (NASDAQ:MAGS), launched successful April 2023, captured the AI commercialized astir perfectly. The ETF has returned 158% since inception, astir treble the S&P 500's astir 80% summation implicit the aforesaid period. Investors who bought aboriginal were rewarded handsomely. Its caller performance, though, changes the story.

Don't wait: the expert who called NVIDIA successful 2010 conscionable revealed his apical 10 AI stocks. See the afloat database FREE now.

Period	MAGS ETF	S&P 500
Since inception (April 2023)	158%	80%
2 Years	44.0%	36.5%
1 Year	9.0%	16.0%
Year to Date 2026	-4.0%	8.0%

The numbers amusement momentum has faded. MAGS inactive edges retired the broader marketplace implicit 2 years, but it has trailed implicit the past twelvemonth and has fallen down severely successful 2026.

Ironically, the aforesaid attraction that fueled marketplace gains has go a headwind. Investors nary longer presumption AI arsenic a azygous trade. Instead, they're distinguishing betwixt companies gathering AI infrastructure and those generating meaningful returns from the hundreds of billions of dollars being invested.

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