Magnificent Seven: What Are They And What's All The Hype About?
By Boring Money
9 Jan, 2026
What are the Magnificent Seven stocks?
The Magnificent Seven (also known as the "Mag 7") are a group of seven major technology companies which have dominated the US stock market in recent years. The group comprises:
Each of the Magnificent Seven stocks are “mega-cap
”, meaning they have a market capitalisation of over USD 200 billion, and are among the largest publicly traded companies in the world. Together, the seven stocks are the same size as the entire stock markets in the UK, Canada, and Japan combined.[1]Thanks to their sheer size, some or all of the Mag 7 appear on the main US stock market indices – including the S&P 500
and Nasdaq – as well as some global indices – such as MSCI World and the FTSE All-World. The group accounts for 30% of the S&P 500’s total market capitalisation of almost USD 50 trillion.[2] This means the performance of these tech stocks often sets the tone, not just for the technology sector, but for the US stock market and beyond.In the investing context, due to their behemoth size and influence, the Magnificent Seven are widely seen as protectors and drivers of growth - particularly in the face of economic uncertainty.
Who coined the term “Magnificent Seven”?
The term “Magnificent Seven” started cropping up in financial media and amongst investors in early 2023. It’s been widely reported that the moniker was coined by Bank of America analyst Michael Hartnett, in reference to the dominance of the seven companies in US markets.[3] The name is a nod to the classic 1960 Western The Magnificent Seven, which featured seven gunslingers hired to protect a small village from a group of bandits.
Historical performance of the Magnificent Seven
The Mag 7 have had a whirlwind ride over the last 5 years, racking up whopping returns of over +240% since January 2021, compared to +81% for its benchmark
index, the S&P 500.[4]The chart below shows the performance of a single $1,000 investment in each of the Magnificent Seven stocks from January 2025 - December 2025.
Magnificent Seven vs FAANG stocks
You might see Magnificent Seven being referred to as the new “FAANG
” stocks. But what’s the difference between the two?The FAANG stocks - Facebook (now Meta), Amazon, Apple, Netflix and Google (now Alphabet) - were essentially the predecessors to the Magnificent Seven, focusing on internet and digital services. These firms surged in popularity in the early 2010s, with the name gaining traction thanks to TV presenter Jim Cramer, who praised the stocks for being “totally dominant in their markets” in 2013.[5]
In more recent years, Mag 7 stocks have come to the fore to represent the new tech elite. While FAANG focused on internet and digital services, the Magnificent Seven emphasise AI, advanced technology, and broader market transformation – think Nvidia’s AI microchips and Tesla’s self-driving cars.
Difference between Magnificent Seven and FAANG stocks
The table below summarises the key differences between the Magnificent Seven and FAANG.
| Magnificent Seven | FAANG |
Stocks | Nvidia, Microsoft, Meta (Facebook), Amazon, Alphabet (Google), Apple, Tesla | Facebook (now Meta), Amazon, Apple, Netflix, Google (now Alphabet) |
Focus | Artificial intelligence | Internet and digital services |
Should I invest in the Magnificent Seven stocks?
No one can predict the future and investment returns are never guaranteed. That being said, the Mag 7 have had a stellar few years and it’s no surprise that investors may be keen to hop on the bandwagon and get a piece for themselves.
That being said, the launch of Chinese AI chatbot DeepSeek in early 2025 shook Mag 7 stocks and the tech sector at large. It claimed to offer performance on-par with the main AI models already on the market - e.g. ChatGPT - but with the benefit of much lower production and operating costs, and data storage requirements.
This sparked a direct contradiction to the narrative over in the US, where major tech firms have been pumping billions into their AI development programmes, with the expectation that further spending would still be necessary to scale up existing models. In the days following DeepSeek's launch, Nvidia saw almost $600bn wiped off its market value - the biggest drop in US market history.[6]
[DeepSeek has] managed to find a way of building these models at a much, much lower cost. So the training cost is much, much lower than the large AI players that you’re familiar with. So this is disruptive in its own right. This means this will put price pressure on the largest players. They will have to up their game, improve their models, and almost certainly reduce their costs to compete with this, which is disruptive in its own right. That’s great news for us as users of AI, but not so great for the bottom line of the big companies that are dominant in this space.[7]
Nevertheless, experts broadly agree that the Magnificent Seven stocks are still worth a look-in - after all, AI is the future.
Michael Greenberg, Senior Vice President and Portfolio Manager for Franklin Templeton Investment Solutions, thinks it’s a good idea to invest in the Mag 7 to capitalise on the long-term development of AI, but cautions not to pin all your investment hopes on just these seven stocks alone:
The Magnificent 7 companies are areas of long-term exposure in a portfolio. We look at the theme as having two phases – AI Enablers, and AI Adopters. The Magnificent Seven companies are the enablers, and the next round of money will be made by correctly identifying who the adopters will be. Diversify outside of the Magnificent Seven, but don’t go to 0% exposure on them either.[8]
James Norton, Head of Retirement and Managed Services at Vanguard Europe, echoes Greenberg’s warning and reiterates the importance of maintaining diversified
to protect your portfolio from any sudden dips or troughs:Fear of missing out (FOMO) on an investment opportunity is a key behavioural driver for many investors. Yet, trendy investments and products don’t necessarily have long-term staying power. [...] Investing in a theme, or a group of stocks exposed to a particular trend, may deliver good performance over a short period, but equally there can be a significant risk of falls.[9]
How can I invest in the Magnificent Seven?
The reality is that most investors – that includes people who have pensions – will probably already have exposure to Mag 7 stocks.
It’s crucial to understand how much exposure you already have to the Magnificent Seven, especially through global or US equity funds. These stocks recently made up around 37% of the S&P 500, so many investors may already be overweight without realising it. While the US remains a hub of innovation, recent market volatility has underscored the importance of diversification.[10]
To understand if you're already invested in the Magnificent Seven, you'll have to do a bit of research. The best place to start is to look at the top holdings of the funds and products you're already invested in.
You will typically be able to go to your fund provider's website, find the information page for your fund, and access the top 10 holdings under "portfolio breakdown" or similar section. This will list the 10 shares which make up the largest proportion of the overall fund. You will usually have the option to see a more detailed breakdown of the full holdings beyond this top 10 as well.
If you've done your research already and you're still looking to add the Mag 7 to your portfolio - or increase your exposure - there are a number of ways to do so:
Individual stocks: You could simply buy each of the seven stocks individually and incorporate them into your portfolio as you see fit (e.g. adding to your ISA or personal pension).
Mag 7-inclusive ETFs: A number of ETFs that hold shares in Mag 7 stocks have emerged in recent years and can be an easy way to incorporate the Magnificent Seven into your portfolio without faffing around with the stocks separately. Some prominent examples include: Vanguard Mega Cap Growth ETF (MGK), Invesco S&P 500 Top 50 ETF (XLG), and iShares S&P 100 ETF (OEF).
Mag 7-specific ETF: Alternatively, Roundhill's Magnificent Seven ETF (MAGS) gives investors equal-weight exposure
to each of the Mag 7 stocks in a single ETF. It's the first ETF to exclusively track the performance of the Magnificent Seven.[11]
Just remember, whichever way you choose to incorporate the Magnificent Seven, make sure to use your ISA to invest and use up your annual allowance so you can minimise Income Tax or Capital Gains Tax on your investment returns!
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