The group of tech giants — Apple AAPL, Amazon AMZN, Microsoft MSFT, NVIDIA NVDA, Tesla TSLA, Alphabet GOOGL and Meta META — known as the "Magnificent Seven" has been battered during the ongoing tariff turmoil. Roundhill Magnificent Seven ETF MAGS has lost 5.9% past month (as of April 14, 2025).
However, the group may see a turnaround once the first-quarter earnings season concludes, according to a note from Canaccord Genuity analyst Michael Graham, as quoted on CNBC.
The cluster of tech giants is slowly regaining investor attention. Following two years of explosive growth driven by the AI boom, these giants have cooled significantly, with valuations now falling to levels last seen before ChatGPT launched in late 2022.
While the recent pause in retaliatory tariffs on electronics offers some relief, Graham believes the companies will still strike a cautious tone in their guidance. He noted that many of these firms are still vulnerable to potential regulatory retaliation.
After all, the trade environment, though improved over the past week, is still volatile. However, the risk level for investors should significantly fall post Q1 earnings season as, by that time, we would have the companies’ rhetorics.
Stock prices have come down considerably. Amazon’s trailing 12-month price-to-earnings (P/E) ratio, for example, is now at 32—down sharply from 86 on the day ChatGPT debuted. NVIDIA, long considered the top AI play, has also seen its P/E fall to 36 from the mid-50s.
Other mega-cap tech names show similar trends. Apple trades at a 29 P/E, nearly back to its pre-AI rally level of 25. Alphabet is at 18, in line with late 2022, and Microsoft sits at 29, slightly above its previous 26.
Only exceptions are Tesla and Meta. Tesla’s P/E ratio has surged to 119, well above its 2022 level of 70, while Meta Platforms trades at 23 compared to just 10 pre-AI. However, most of the Magnificent Seven remain deep in correction territory or the bear market.
Last week saw a wave of bargain-hunting amid market volatility. The latest announcement of some kind of tariff exemptions to electronics imports may act as a major tailwind. While many are now interested in individual stock picking in the Mag-7 group (based on each company's individual strength and weakness), the group's core strengths remain intact: solid balance sheets, and enduring competitive advantages, per analysts.
Bottom Line
No one underrates the opportunities in the -Mag-7 group. But the era of group-wide rallies appears to be over, replaced by more scrutinized stock selection and measured optimism. Despite more attractive valuations, investors are no longer treating the group as the pillar of Wall Street.
The “Magnificent Seven” have probably fallen from grace. Stock performances within the group have diverged, due to factors such as new cheaper-cost AI entrants (e.g., DeepSeek) and individual companies’ ability to handle broader macro uncertainty (read: Will the Rise of DeepSeek Usher in a New AI Era? ETFs in Focus).
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ETF Picks
Microsoft and Alphabet shares have been less beaten down over the tumultuous past month. MSFT-heavy exchange-traded funds (ETFs) like iShares Global Tech ETF IXN and Alphabet-heavy ETFs like Fidelity MSCI Communication Services Index ETF FCOM can be played. However, these ETFs also house other Mag-7 constituents. Due to the incessant chip demand, NVIDIA deserves a mention, and so does NVDA-heavy ETF Strive U.S. Semiconductor ETF SHOC.
And if you want to go for group-wide picks, you have options like MAGS, Vanguard Mega Cap Growth ETF MGK, Invesco S&P 500 Top 50 ETF XLG and iShares S&P 100 ETF OEF to play on.
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Amazon.com, Inc. (AMZN) : Free Stock Analysis Report
Apple Inc. (AAPL) : Free Stock Analysis Report
Microsoft Corporation (MSFT) : Free Stock Analysis Report
NVIDIA Corporation (NVDA) : Free Stock Analysis Report
Tesla, Inc. (TSLA) : Free Stock Analysis Report
Alphabet Inc. (GOOGL) : Free Stock Analysis Report
Fidelity MSCI Communication Services Index ETF (FCOM): ETF Research Reports
Invesco S&P 500 Top 50 ETF (XLG): ETF Research Reports
iShares Global Tech ETF (IXN): ETF Research Reports
Vanguard Mega Cap Growth ETF (MGK): ETF Research Reports
iShares S&P 100 ETF (OEF): ETF Research Reports
Meta Platforms, Inc. (META) : Free Stock Analysis Report
Strive U.S. Semiconductor ETF (SHOC): ETF Research Reports
This article originally published on Zacks Investment Research (zacks.com).
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