The Magnificent Seven stocks — Nvidia, Apple, Microsoft (NASDAQ: MSFT), Amazon (NASDAQ: AMZN), Alphabet, Meta Platforms, and Tesla — collectively account for roughly a third of the entire S&P 500.
The group earned its name in 2023 after driving a significant portion of the broader market’s gains, and their influence on overall market performance remains substantial today.
Despite being grouped together, individual performance across the seven has varied considerably over the past three years, with some names lagging the wider market significantly.
Microsoft is up 48.6% and Amazon up 73.8% over that period, making them the second- and third-worst performers in the group as of September 14.
Tesla holds the bottom spot with a 31.9% gain, while the S&P 500 returned 70.4% over the same timeframe, putting several Magnificent Seven names in an awkward position.
Microsoft’s stock has gained only 3.5% this year, and without a roughly 26% surge following its fourth-quarter fiscal 2026 earnings report, it would likely be down by double digits.
Much of the early-year weakness stemmed from investor concern over Microsoft’s heavy AI spending, but a strong quarterly report helped put many of those fears to rest.
Azure, Microsoft’s cloud platform, posted revenue growth of 43% year over year, and Microsoft’s Intelligent Cloud segment accounted for over 39% of the company’s total operating income.
Microsoft also recorded its first $100 billion fiscal year, a milestone that signals the AI infrastructure investment is beginning to translate into meaningful financial results.
The company plans to spend $175 billion in fiscal 2027, a figure that continues to generate debate, but the underlying business fundamentals are pointing in the right direction.
Beyond AI, Microsoft’s deep entrenchment across enterprise software, hardware, and cloud services gives it a competitive moat that supports long-term durability across economic cycles.
Microsoft has also increased its annual dividend for 23 consecutive years, making it one of the most reliable dividend growers in the technology sector despite its modest 0.7% yield.
Amazon’s story in 2026 follows a similar pattern, with the stock underperforming the S&P 500 despite operating a business that is arguably in its strongest shape in recent memory.
Amazon generated $200.6 billion in revenue during the second quarter alone, a 20% year-over-year increase, making it the highest-revenue-generating public company in the world.
AWS remains the core profit engine, contributing over 60% of Amazon’s total operating income in Q2 while representing only 21% of total revenue, a margin dynamic that continues to impress analysts.
AWS growth had stalled for a stretch but bounced back with a 36.7% jump in Q2, the biggest quarterly growth rate the cloud division had posted in 18 quarters.
Amazon plans to spend $220 billion this year on AI infrastructure, drawing the same type of spending criticism Microsoft has faced, though AWS’s reignited growth serves as an early justification.
Beyond e-commerce and AWS, Amazon’s business is increasingly diversified, with a fast-growing advertising segment, entertainment presence through Prime Video and Twitch, and an expanding healthcare footprint via Amazon Pharmacy.
Amazon currently trades at 20.1 times earnings, the second-lowest valuation among the Magnificent Seven stocks, offering a compelling entry point given its scale and growth trajectory.
For patient investors willing to look past near-term underperformance, both Microsoft and Amazon present strong cases as foundational long-term holdings within the technology sector.
