Key Takeaways
- After lagging the S&P 500’s gains for most of 2025, the Magnificent 7 recently overtook the benchmark index to reclaim its lead. Tesla, Google parent Alphabet, and Apple have been the biggest contributors to the group’s gains in recent weeks.
- There’s wariness in some corners about the performance of stocks. But many market watchers think that, at least in the short-term, the setup looks good for more upside.
Last year’s Magnificent 7 tech leaders are rolling again.
That hasn’t always been the case this year. As a group, the the large-cap technology companies—Apple (AAPL), Nvidia (NVDA), Microsoft (MSFT), Amazon (AMZN), Alphabet (GOOG, GOOGL), Meta (META) and Tesla (TSLA)—have lagged the broader market for most of 2025. That’s led to questions about whether the grouping’s reign is over or if its membership should change.
Then came September’s rally. The Roundhill Magnificent Seven ETF (MAGS) is now up nearly 20% year-to-date, ahead of the S&P 500’s close to 15% gain; it more than doubled the benchmark index’s performance in the third quarter. The question now: What next?
The bullishness hasn’t dried up. Jeff Buchbinder, chief equity strategist at LPL Financial, said Thursday that growth stocks, particularly those with ties to AI, were supported in the third quarter by strong earnings, expectations of AI-driven growth, and easing interest rates, which make borrowing less expensive. Wall Street analysts largely expect those trends to continue.
There’s wariness about a bubble in AI; Even Jeff Bezos has suggested that it’s in a kind of “industrial bubble” in which it can be difficult for investors to identify the future winners and losers from the field of would-be standouts.
Bank of America analysts on Friday said that “every bubble in history popped by central bank tightening, and no central bank in the world has hiked rates in past 2 months.” A recent survey of Investopedia readers suggested cooling optimism about the stock market, though they said they remain heavily invested in growth stocks even with valuations at high levels.
Why This Matters to Investors
The Magnificent 7’s resurgence comes on the back of a rebound by tech heavyweights like Tesla and Apple, which had spent most of the year in the red. Their influence within the S&P 500, meanwhile, illustrates the power the group of tech giants have on global markets.
The recent performance of some Magnificent 7 stocks highlights the breadth of the enthusiasm. AI darling Nvidia, which has seen its stock rise steadily since April as sales of its chips boomed and trade policy headwinds eased, remains the biggest gainer of the year. But Tesla, Google parent Alphabet, and Apple have been the biggest contributors to the group’s advance in recent weeks after spending a large part of the year in negative territory.
Gains for Tesla’s stock, which added a third of its value in September, came as worries about CEO Elon Musk’s political activities and slumping sales cooled, and bulls shifted their focus toward the electric vehicle maker’s advances in autonomous driving, robotics, and AI.
Alphabet climbed about 15% in September after a major legal win in which a federal judge ruled Google doesn’t have to sell its Chrome browser. Apple rose close to 10% after signs of surprisingly strong demand for its latest iPhone 17 and inroads with the Trump administration.
All this has many market watchers wondering when the party might end but unwilling to leave just yet. Pictet Asset Management Chief Strategist Luca Paolini on Friday noted the expectation of lower rates and strong corporate profits among reasons to “see upside in equities despite possible impacts of the US government shutdown.”
Pictet, he wrote, sees “upside in riskier asset classes in the short term.”
This article has been updated since it was first published to reflect more recent market levels.
