Episode summary
Is the Mag Seven Dead? Here's What the Desks Are Asking
Summary
The host argues that the Magnificent Seven is “dead” as a short-term trade, but not as a long-term investment. His core point is that markets move in narratives, and right now the AI story that powered the Mag Seven has run out of steam, leaving a period of regrouping before the next catalyst appears.
He compares the Mag Seven cycle with the earlier FAANG trade, using Bloomberg data relayed by John Authers. Both momentum waves lasted about three years, both climbed roughly 40%, and both eventually gave back a large part of the gains. That similarity, he says, is evidence that the market is being driven less by fundamentals than by a dominant story that eventually exhausts itself.
The host also points to a sharp drop in media mentions of Magnificent Seven stocks, from around 4,000 a month in 2024 to about 1,500 now, as another sign the narrative is fading. He thinks the next big market story may be embodied intelligence and robotics, with Tesla, robotaxis, Optimus, and even SpaceX framed as early clues to that shift.
Key takeaways
- Dylan Grice says the Mag Seven is “dead” as a short-term trade, but still looks like a long-term bargain set.
- He argues that the market’s big winners are driven by narratives, not just fundamentals, and those stories eventually fade.
- He says the FAANG and Mag Seven rallies were strikingly similar: about three years long and roughly 40% up before giving back gains.
- He notes Bloomberg-style mentions of Magnificent Seven stocks have fallen from about 4,000 a month in 2024 to roughly 1,500 now.
- He thinks the next major market narrative could be embodied intelligence and robotics rather than the current AI trade.
Notable quotes
“As a short-term trade, the Mag 7 is dead, for lack of a better word. As a long-term trade, I bet you there are some of the best bargains you're going to see in a long time”
“markets run on narratives. They really do run on stories”
“the Mag 7 hyperscaler trade, you know, Amazon, Alphabet, Apple, Meta, Microsoft, Nvidia, and of course Tesla”
“This is being mentioned. Now, look, this certainly doesn't mean that the big companies involved in the Mag 7 trade are going out of business”
“My suspicion is that the next moment is going to be kind of a big bang moment, is going to be the EI moment, the embodied intelligence moment”
How the episode opens
Good morning. This Dylan Jovaneh with Behind the Markets. Happy Thursday.
Today is Thursday, July 30th. Tomorrow's the last day of the month and I'd like to ask a question, is the Mag 7 dead? Is the Mag 7 dead?
And I always like headlines like this or questions like this. This is a question being asked around trading desks all over Wall Street right now. Friends of mine on the street are asking themselves.
They've been asking me what I think about it and I always love when somebody asks me a question like that because it usually means stocks that are like a pretty cheap. Anyway, so this is the big question that's being asked and I'd say my answer to them is yes. As a short-term trade, the Mag 7 is dead, for lack of a better word.
As a long-term trade, I bet you there are some of the best bargains you're going to see in a long time. But look, this illustrates a very, very important point that I'd like to really impress upon you as a viewer of this channel, is that markets run on narratives. They really do run on stories.
The longer I'm in the business, you know, decade after decade, the clearer that becomes to me that markets really run on stories. And it's really kind of impossible to explain what's happening right now without putting it in the context of a market story. And I'm going to reference some data that I picked up from John Authers of Bloomberg who runs the Point of No Return newsletter, which is great, by the way.
But you know, he points out that since the Global Financial Crisis, there have been two long momentum waves in the stock market. The first, from 2017 basically to the pandemic, centered on the FANGs.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- magnificent seven outlook
- momentum narratives
- ai capex and hyperscalers
- news-mention momentum
- robotics and embodied intelligence
Companies and tickers mentioned
- AAPL
- MSFT
- GOOGL
- GOOG
- AMZN
- NVDA
- META
- TSLA
- Apple
- Microsoft
- Alphabet
- Amazon
- Nvidia
- Meta
- Tesla
- Bloomberg
- OpenAI
Watch the episode
Watch “Is the Mag Seven Dead? Here's What the Desks Are Asking” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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