A significant shift is occurring in the stock market as the once-unassailable "Magnificent Seven" technology stocks show signs of slowing growth. A new group of large-cap companies, including Broadcom, Oracle, and Palantir, is now capturing investor attention and driving the next phase of the artificial intelligence market expansion.
While the original seven companies remain influential, their collective performance has become uneven, creating opportunities for other established tech firms to rise as key players in the AI sector.
Key Takeaways
- The "Magnificent Seven" tech stocks are experiencing a slowdown in collective market value growth in 2025.
- Companies like Broadcom, Oracle, and Palantir are gaining prominence as the next wave of AI market leaders.
- Performance within the Magnificent Seven has diverged, with some members lagging while others continue to grow.
- Strategic deals, such as Oracle's major cloud contract with OpenAI, are repositioning companies as essential AI infrastructure providers.
A Change in Market Leadership
The group of megacap technology stocks known as the Magnificent Seven, which includes Apple, Microsoft, Alphabet, Amazon, Nvidia, Meta, and Tesla, has been the primary engine of market growth. However, recent data indicates a deceleration in their combined momentum.
According to Dow Jones Market Data, the group added $3.1 trillion in market capitalization during the first three quarters of 2025. While this is a substantial figure, it represents a slower pace compared to previous periods when they were capable of adding over $5 trillion in a year.
This slowdown suggests that the benefits of the AI boom are beginning to spread to a wider set of companies, even as the largest players maintain their significant market presence.
Who are the Magnificent Seven?
The term "Magnificent Seven" refers to a group of the largest and most influential technology companies in the U.S. stock market. These companies dominated market returns, largely driven by their scale and early investments in technologies like artificial intelligence and cloud computing.
Diverging Fortunes Within the Core Group
The overall slowdown in the Magnificent Seven's growth is not uniform across all its members. A clear divergence in performance has emerged in 2025, highlighting different strategic positions and market challenges.
Nvidia, Alphabet, Microsoft, and Meta have continued to perform strongly, benefiting directly from the ongoing demand for AI technologies. Their year-to-date stock gains reflect this, with increases of 40.8%, 28.6%, 22.5%, and 24%, respectively.
In contrast, other members of the group have faced headwinds:
- Apple Inc. (AAPL): The stock has seen a modest rise of only 2.7% this year. The company has adopted a more cautious and deliberate approach to integrating AI features, while competitors have moved more aggressively.
- Amazon.com Inc. (AMZN): With a stock increase of just 1.3%, Amazon has faced concerns over slower-than-expected growth in its cloud division, Amazon Web Services (AWS). Investors have noted the faster growth in the cloud businesses of Microsoft and Alphabet as a potential sign of increasing competition.
- Tesla Inc. (TSLA): The electric vehicle maker's stock is up 10% for the year but has been affected by reports of declining sales, loss of market share in Europe, and intensified global competition.
The Rise of New AI Contenders
As some of the Magnificent Seven's stocks show signs of maturing growth, investors are increasingly looking toward the next tier of companies poised to lead the AI market. Broadcom and Oracle have become prominent examples of this shift.
Oracle's Cloud Ascendancy
Oracle Corp. (ORCL) has made significant strides, particularly in its cloud infrastructure business. The company recently announced a landmark $300 billion cloud computing agreement with OpenAI. The deal commits OpenAI to purchase computing power from Oracle for approximately five years, beginning in 2027.
"The Magnificent Seven are here to stay. However, we should recast it as the Magnificent Ten, but the importance of these large-scale leaders is going to continue," said Dan Hanson, senior portfolio manager at Neuberger Berman.
This partnership has bolstered investor confidence in Oracle's ability to compete at the highest level of the AI infrastructure market. Following this and other positive news, Oracle's stock rose 24.3% in September alone.
A Massive AI Deal
Oracle's $300 billion deal with OpenAI is one of the largest publicly disclosed cloud computing agreements to date, underscoring the immense capital required to train and operate advanced AI models.
Broadcom's Strategic Positioning
Broadcom Inc. (AVGO), a key player in the semiconductor industry, has also seen its stock surge. Shares climbed 10.9% last month after the company delivered a strong fourth-quarter outlook that surpassed analyst expectations.
The company's stability was further reinforced when its chief executive announced his intention to remain in his role until at least 2030. Broadcom also secured a new customer for its custom AI chips, signaling continued growth in a critical segment of the AI supply chain.
Will the AI Rally Broaden?
While new leaders are emerging, some analysts believe the AI-driven market rally will remain concentrated among a select group of large-scale companies. The immense capital investment required for cutting-edge AI development creates a high barrier to entry.
Dan Hanson of Neuberger Berman noted that while the leadership group is expanding, it is unlikely to broaden to the wider market, such as the remaining S&P 493 companies.
"The benefits of scale that have allowed for such massive capital-spending commitments among the hyperscalers in particular to capitalize on the AI opportunity is a flywheel, a juggernaut that’s going to ensure continued relevance for those sets of companies," Hanson explained. This suggests that while the names may change, the market trend of being led by a handful of tech giants is likely to persist.
