Tech giants that have dominated Wall Street for two years are losing their grip, with the so-called Magnificent Seven stocks shedding about $1.4 trillion in market value since December, Bloomberg reported Tuesday.

The Bloomberg Magnificent Seven index—tracking Apple Inc (NASDAQ:AAPL), Nvidia Corp (NASDAQ:NVDA), Microsoft Corp (NASDAQ:MSFT), Google parent Alphabet Inc (NASDAQ:GOOG, GOOGL)) (NASDAQ:GOOGL), Amazon.com Inc (NASDAQ:AMZN), Meta Platforms Inc (NASDAQ:META) and Tesla Inc (NASDAQ:TSLA)—has fallen roughly 10% from its December peak, officially entering correction territory.

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Tesla has been the hardest hit, followed by Microsoft and Alphabet. Elon Musk‘s electric vehicle maker initially surged after President Donald Trump‘s November election victory but has since faced declining sales and intensifying competition from Chinese rivals like BYD.

Meta stands as the lone bright spot, bucking the downward trend as investors endorse its AI strategy. The Facebook parent recorded a 19-day winning streak in February, adding more than $320 billion in market value.

“The stock market has lost its leadership,” Jim Paulsen, an independent market strategist, told  the Financial Times.

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It's a pivot from 2023 and 2024, when the seven companies posted enormous gains and drove the broader market higher. The Magnificent Seven had surged more than 160% between the start of 2023 and the end of 2024, according to the FT, but the index has added just 1% so far this year.

Investors are rotating into other sectors, with U.S. bank stocks attracting almost $2 billion in the week ended Feb. 3—the second-largest weekly inflow since 2008, according to Bank of America data cited by FT. Healthcare companies, European equities, gold, and smaller tech groups have also benefited from this repositioning.

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Meanwhile, money is increasingly flowing toward privately held tech companies, with Anthropic, Coreweave, Databricks, OpenAI, Perplexity, ScaleAI and xAI—now dubbed the “Private Magnificent Seven,” seeing their cumulative valuation rise 40% between July and January, according to FT.

Most market watchers view the broadening gains as healthy for what had become an expensive, top-heavy market. However, JPMorgan analysts led by Mislav Matejka caution that faster AI adoption and fewer barriers to entry could spell long-term trouble for the established tech giants.

“Historically, it was never the incumbents which benefited from technological disruption, but the outsiders,” Matejka told FT.

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This article Wall Street Is Shying Away From The 'Mag-7' As $1.4 Trillion In Value Leaks Out originally appeared on Benzinga.com

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