The Magnificent Seven (Mag 7) of U.S. technology companies are relinquishing the leadership they held for years and in 2026 are lagging behind the stock market as a whole. The Bloomberg index that tracks them is up just 3.80% since the start of the year, while the Nasdaq 100 has surged 19.20%, and the S&P 500 has also left them far behind. The July earnings season confirmed a deep split within the Mag 7, with only Nvidia still to report.
The Magnificent Seven are no longer driving the Nasdaq
The gap between the Magnificent Seven and the rest of the market is now very wide, as can be seen in the accompanying chart. Their index has stalled at a 3.80% gain, while the Nasdaq 100 has soared 19.20%, a gap of more than 15 percentage points that has widened in the second half of the year.
Within the group, the spread remains extremely wide and tells completely different stories. Nvidia has led since the beginning of 2026, gaining 18.61%, followed by Amazon at 13.53% and Apple at 12.37%. Further behind are Alphabet at 8.17% and, above all, Microsoft, up just 2.27%. Weighing down the basket’s average are its two genuine drags: Meta, down 11.00%, and Tesla, down 25.24%. Once the engine of the rally, the group is now being pulled along by the broader market.
Leadership has shifted to memory and semiconductors
If the Nasdaq is up 19.20% while the Mag 7 are struggling, it is because the momentum is coming from elsewhere in the market, as shown in the accompanying performance table.
Leadership has shifted to memory and semiconductor manufacturers, which have posted impressive gains this year. Micron is up 229.24% since the start of the year, while Marvell has gained 155.96% over the same period. It is the supply chain providing components for artificial intelligence that is truly driving the market now, rather than the group’s established names. The same sector also shows its downside, however, as Oracle is down 23.78% since January. The theme of the year is therefore not the strength of the Mag 7, but the transfer of strength toward the companies building the infrastructure.
Quarterly results reward those generating revenue
The quarterly results released in July showed that the market no longer accepts spending on artificial intelligence as an act of faith. That actual spending must be matched by accelerating revenue. Microsoft and Amazon passed the test, driven by strong cloud growth.
Companies that increased spending without showing equally rapid revenue growth were punished instead, including Alphabet and Meta. Tesla paid the price for collapsing margins and cash flow turning negative—that is, cash being consumed rather than generated. Apple remains somewhere in the middle: its results were deemed satisfactory, but investors nevertheless sold the stock.
The real verdict will come with Nvidia
Missing from this earnings-season picture is Nvidia, which will publish its results on Wednesday, August 26, after the market closes. Official guidance points to expected revenue of around $91 billion. Nvidia will provide an indication of demand for chips, which measures the resilience of the entire AI investment cycle. This creates two opposing and very clear scenarios for the entire sector. If data-center growth holds up, the weakness in the Mag 7 is a short-term cyclical correction within an uptrend. If Nvidia also falters in its results, valuations across the entire sector will be revised downward.
