The Magnificent Seven's Reign May Be Ending: A New Era for AI Stocks?
The dominance of the "Magnificent Seven" stocks may be waning as the artificial intelligence (AI) landscape evolves. Wall Street is considering new groupings like the "Great Eight" or "Golden Dozen" to better represent the emerging leaders in the AI revolution. The original seven – Nvidia, Microsoft, Apple, Alphabet, Amazon.com, Meta Platforms, and Tesla – have significantly contributed to the S&P 500's growth, but the AI trade is expanding beyond them.
The Rise of New AI Powerhouses
While the Magnificent Seven has driven market performance, companies like Broadcom, Oracle, and Palantir Technologies are emerging as significant players in the AI space. These companies are capitalizing on specific AI opportunities, proving that dominance in past tech cycles doesn't guarantee future success. As Mr. Chris Smith, portfolio manager of Artisan Partners’ Antero Peak Group, notes, "The next winners will be the ones that address large and unconstrained markets through AI, becoming bigger companies in the future than the Mag Seven are today."
Performance Divergence Within the Magnificent Seven
Although the Magnificent Seven still holds considerable weight in the S&P 500, their individual stock performance varies significantly. Nvidia, Alphabet, Meta, and Microsoft are seen as well-positioned for the AI future, while Apple, Amazon, and Tesla are lagging. This divergence has led to proposals for revised groupings, such as a "Fab Four" or "Big Six," that more accurately reflect the AI landscape. According to Mr. Jonathan Golub, chief equity strategist at Seaport Research, some strategies consider removing Tesla from the top tier.
Emerging AI Stock Stars
Companies like Oracle, whose shares are up more than 75% in 2025, and Palantir, which has soared 135% in 2025, are demonstrating strong growth tied to AI. Mr. Jurrien Timmer, director of global macro at Fidelity Investments, suggests that as the AI story evolves, new winners could replace old ones, even if the original leaders continue to perform well. The Cboe Global Markets is even launching futures and options based on the Cboe Magnificent 10 Index, which includes the original seven plus Broadcom, Palantir, and Advanced Micro Devices (AMD).
The Next Generation of AI Leaders
Taiwan Semiconductor Manufacturing Co (TSMC) is viewed as crucial to the AI ecosystem, alongside Oracle and Broadcom. Palantir stands out as a key AI software winner. Apple and Tesla are frequently mentioned as potentially losing ground. However, these companies still maintain a strong investor base betting on their future AI potential. There is a lengthening list of industries that are seeing some benefit from the proliferation of AI including power companies and companies that support the building of AI infrastructure such as Arista Networks, Micron Technology, Western Digital Corp, Seagate Technology Holdings and SanDisk.
Private AI Players and the Evolving Landscape
Several key AI companies, such as OpenAI, Anthropic, and SpaceX, are privately held, limiting investor access. As AI adoption expands, the beneficiaries will shift from enablers to those offering AI-specific services and eventually to businesses leveraging AI for efficiency and growth. This transition will ultimately determine the long-term winners in the AI space. As Mr. Timmer states, "As that evolution happens, the leaders of the AI boom may become expensive, their growth and cash flow could stop looking as good, and the trade will start to fray at the edges."
