Wall Street's favorite Big Tech trade is splintering: 3 charts

Good morning, investors. With Big Tech earnings kicking off today, starting with Tesla and Alphabet, we’re turning our attention to how the Magnificent 7 trade has diverged over the last year — especially since Liberation Day.

A message from our partner, Ondo Finance:

Ondo Finance is driving one of the most significant upgrades to global finance through real-world asset tokenization.

Tokenization is poised to reshape $16 trillion in assets by 2030, and Ondo Finance is at the forefront, partnering with the world’s largest institutions, setting industry standards, and pioneering a financial system that’s faster, fairer and more accessible to all.

Learn more.

Magnificent single stocks

Big Tech isn’t one single trade anymore. It’s seven. 

The Magnificent 7 has fractured from a unified investment theme into a basket of haves and have-nots, split between AI winners like Nvidia and Meta and consumer-facing giants like Apple and Tesla that have quietly slid into correction territory. 

The story becomes obvious when you unpack how these stocks have fared over the last 12, 7, and 4 months.

The data point to diverging plays splintered by sector, strategy and sentiment.  

Over the last year, Nvidia and Meta have returned 39% and 46%, respectively. Apple and Google — once considered “safe” bets for any index-heavy investor — have been flat. 

When you zoom in to year-to-date returns, the divergence becomes more clear. 

Nvidia, Meta and Microsoft have each added roughly 20%, while the other four names are either flat or down double-digits. 

This year, Apple and Tesla have seen sharp drawdowns that have been largely hidden beneath the strength of the Nasdaq Composite and its recent string of record highs.

Unlike years past, the broad market index no longer reflects the story of the mega-cap names driving it.  

If we take out the first quarter and track performance from the week of President Trump’s Liberation Day announcement, the story shifts again and more dramatically. 

• Nvidia is up more than 50% in less than four months

• Microsoft, Tesla, Meta, Alphabet and Amazon are all hovering at a 20% gain since the start of April

Only Apple remains negative in the period. 

Taking all three snapshots into consideration, it’s clear investors no longer buy into the Magnificent Seven as one story.

Each individual name is now subject to scrutiny for its balance sheets, growth narrative, and exposure to both AI and macro shocks. 

• Nvidia and Microsoft offer upside on AI infrastructure

• Apple faces potential tariff exposure and softening iPhone sales

• Elon Musk’s political ventures and weaker EV sales have weighed on Tesla stock

Passive exposure to the group still outperforms the S&P 500, but because of several laggards the returns are no longer as outsized.

Roundhill’s Magnificent Seven ETF (MAGS) is up 23% over the last 12 months, and up about 10% against the benchmark index. 

Wall Street still sees the Magnificent Seven stocks holding enormous influence on S&P 500 earnings growth. Analysts expect the group to report year-over-year earnings growth of 14.1% for the second quarter, according to FactSet. 

Without that boost, the rest of the S&P 500 would only see earnings growth of 3.4%. 

Like this shortened edition? Sign up free to get the full version of Opening Bell Daily in your inbox each morning.