The ‘Magnificent 7' stocks have lost their grandeur and dominance in 2025, as none of the top seven technology giants have ranked among the top 50 performers of S&P 500 on a year-to-date basis. Analysts at Charles Schwab detail this rotation out of tech giants into the broader markets in their latest note.
What Happened: Liz Ann Sonders, the chief investment strategist at Charles Schwab & Co., along with Kevin Gordon, highlighted in her latest X post that the market focus was shifting away from Big Tech in 2025, terming it as "Mag7 to the Meh7"
As the S&P 500 logged its worst day of 2025 and second-worst day of March ever in 2025 on Monday, the index remains just 4.84% down from its 52-week high of 6,147.43 points.
According to Schwab's note, the dispersion in Mag7 stocks has widened out alongside a significant drop in year-to-date performance rankings relative to last year. "Not one of the stocks is even in the top-50 best performers this year," the note said. Whereas, only Meta Platforms Inc. META has outperformed the S&P 500 index.
| Stocks | YTD Performance | One Year Performance |
| Nvidia Corp. NVDA | -17.53% | 33.81% |
| Apple Inc. AAPL | -2.39% | 35.94% |
| Microsoft Corp. MSFT | -7.19% | -6.37% |
| Amazon.com Inc. AMZN | -6.90% | 15.45% |
| Alphabet Inc. Class A GOOGL | -11.84% | 25.24% |
| Meta Platforms Inc. META | 9.31% | 31.49% |
| Tesla Inc. TSLA | -24.95% | 51.30% |
| S&P 500 | -0.32% | 14.01% |
| SPDR S&P 500 ETF Trust SPY | -0.15% | 13.95% |
"We think the Mag7’s struggle year-to-date is justified, or perhaps explained, by the shifting earnings environment," the note stated. It detailed that S&P 500 excluding the Mag7 is showing a trend of increasing forward earnings growth.
Forecasts indicate that Mag7 earnings growth will be lower in 2025 compared to 2024, while the opposite trend is expected for the S&P 500 excluding the Mag7.
Why It Matters: The analysts further explain that this isn't a "bad news" for stock pickers. Over the last year, only 22% of the constituents in the S&P 500 outperformed the index, whereas over the last month, 50% of the stocks were outperforming the index.
The note details a performance shift observed in the market this year, with a move away from previously favored stocks towards defensive sectors. According to Schwab, this shift is a combination of factors, including significantly heightened policy-related uncertainty, as well as traditional fundamental concerns surrounding earnings and valuations.
It is important to be "mindful of diversification and periodic rebalancing," as the analysts expect sector swings to persist throughout the year.
Price Action: The SPDR S&P 500 ETF Trust SPY and Invesco QQQ Trust ETF QQQ, which track the S&P 500 index and Nasdaq 100 index, respectively, were mixed in premarket on Tuesday. SPY fell 0.03% to $583.61, while QQQ rose 0.15% to $497.82.
On Monday, the SPY declined 1.75% to $583.77, and the QQQ dropped 2.19% to $497.05, according to Benzinga Pro data.
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