"The Magnificent Seven sailed into 2026 in a rather muted spot. While there has been a notable divergence in performance among the members, I do think that the group remains worth sticking with for the long haul, especially the names that have been viciously marked down. Whether we're talking about heavy AI capex that's made investors uncomfortable or strong growth that's failed to meet high expectations, I do think there's an opportunity for stock pickers to nab great value in the group."
"That said, I do think that the results have been incredibly strong and that investors might be a bit shortsighted, maybe even impatient, as they demand strength (even a blowout) sooner rather than later. Of course, it's a chore for most investors to wait for results these days. As such, many investors may be at risk of exiting perfectly good growth companies with sound AI narratives, just because the front-loaded AI investments are likely to take longer to live up to expectations."
The Magnificent Seven entered 2026 with muted performance and notable divergence among members. Several names have been heavily marked down despite durable competitive moats and powerful AI strategies. Heavy AI capital expenditures and growth that fell short of lofty expectations have made investors uncomfortable. Short-term impatience risks causing investors to exit fundamentally sound growth companies before AI investments mature and monetize. About half of the Mag Seven reported the latest quarter, producing mixed market reactions. Two Mag Seven names now look cheaper following the most recent earnings, with Microsoft among the most notable cases after a greater-than-10% share decline despite decent results. Companies must demonstrate AI-generated revenue, not just spending, to counter AI-bubble concerns.
Read at 24/7 Wall St.
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