Wall Street's most powerful tech giants are rewriting the rules of market dominance.

What Happened: The so-called Magnificent Seven tech giants surged to a record-breaking $19.4 trillion in combined market value Thursday morning. This latest surge is reshaping the very structure of the S&P 500—leaving investors stunned.

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The combined market cap is now above China's entire economy, which was worth $18.7 trillion in 2024, according to the World Bank.

At $19.4 trillion, the group is nearly as large as the Eurozone and U.K. economies combined—$16.4 trillion and $3.6 trillion, respectively.

AI Tailwind Fuels Microsoft, Meta

Shares of Meta Platforms rallied over 12% during Thursday’s morning trading in New York, while Microsoft rose 6%, with the latter topping $4 trillion value for the first time.

Microsoft's gains were driven by robust AI momentum.

Goldman Sachs analyst Kash Rangan said the company's performance "validates our thesis that AI percolates up the stack."

He highlighted that Azure Databricks and OpenAI use cases are scaling rapidly, while CapEx surged 58% to over $88 billion without eroding margins.

He sees Microsoft "well-positioned to capitalize on this shift and drive earnings reacceleration." to drive another cycle of earnings reacceleration, citing upside from OpenAI revenue sharing and cross-selling across its ecosystem.

Goldman Sachs raised Microsoft’s 12-month price target from $550 to $630, implying a 17% surge from current levels.

Bank of America's Brad Sills echoed that view, calling Microsoft a clear "AI beneficiary" across infrastructure and applications. He raised the firm's price objective to $640 from $515.

Meta's stock also climbed following its earnings beat and strong guidance.

Goldman Sachs analyst Eric Sheridan said AI is driving upside in ad engagement, monetization and operating performance.

"Instagram video watch time is up 20% YoY globally, and AI ad tools like Advantage+ are scaling fast," he said, highlighting the company's resilience even as expenses rise.

Goldman raised Meta’s 12-month price target from $775 to $830, stating that "visibility into 2026 and beyond topline growth will be critical" as Meta invests in long-term initiatives like its Superintelligence Lab and spatial computing projects.

Bank of America's Justin Post also remained bullish, saying Meta's growing ad capabilities and AI strength "reinforce our confidence" in the stock's long-term trajectory.

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