The Magnificent Seven helped drive the market sideways this year. At one point, not a single stock traded at a higher price than the S&P 500 during 2026. All of that has changed quickly.
Axios created a simple chart that showed the price of the Mag 7 as a composite. At the start of the year, it was valued at $65. The composite dropped to $55 in late March and early April. Now, the index trades at $66.32.
What happened? The Mag 7 are 33% of the value of the S&P 500. That gives them an outsized effect on the index.
What happened is mostly Nvidia (NASDAQ: NVDA | NVDA Price Prediction), which is up over 8% year to date. Amazon (NASDAQ: AMZN) happened, too. It is up 7.5%. Alphabet (NASDAQ: GOOG) is up 7%. Microsoft (NASDAQ: MSFT) is still the dog, down 14%. And, Tesla (NASDAQ: TSLA) is off 12%
What happened? To a large extent, a renewed faith in AI’s future. OpenAI’s valuation jumped to $853 billion, on a raise of $122 billion. Anthropic’s valuation recently surged to $800 billion. The private market’s activity helped drive the public one.
Nvidia has an easy analysis. It is still an AI arms merchant. AI does not exist without it. At $4.9 trillion, it is still the most valuable company in the world
The investments that Alphabet and Amazon are making in AI currently seem sensible. But more importantly, each has a hugely successful core business. For Amazon, there are two: e-commerce and AWS. For Alphabet, it appears that search has not been badly dented by AI searches. And, Gemini, almost certainly the leader in the percentage of the most successful AI implementations, adds another factor.
And, there is the expectation of strong earnings. According to Yahoo, “Fresh analysis of S&P 500 earnings estimates by Morgan Stanley underscores the point. Net income growth for the Magnificent Seven is expected to not only accelerate in the first three quarters of this year, but it’s also poised to sharply outpace the rest of the S&P 500.”
The Mag 7 could be back on top for a long time, if the Morgan Stanely analysis is correct.
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