Episode summary
The Magnificent 7 is Over: What Stocks Will Replace It?
Summary
The host argues that the Magnificent 7 label is starting to lose usefulness because several of the stocks no longer look equally “magnificent” on recent price action, earnings momentum, and valuation. She reviews five-year, one-year, and six-month performance and says Amazon and Tesla have been especially disappointing relative to the S&P 500, while Nvidia, Alphabet, Microsoft, and to a lesser extent Meta still have stronger fundamentals.
The episode then works through each name’s earnings outlook and valuation. Nvidia remains the standout on revenue and EPS growth, though the stock has paused; Alphabet and Microsoft still show solid AI-driven growth; Amazon looks cheaper and has a credible earnings rebound; Apple is defended by its long history but called too slow-growing for its valuation. Tesla is the clearest candidate to be removed because earnings are declining and the forward multiple is extremely rich.
The host suggests the next market leaders may come from outside big tech, highlighting Palantir and Eli Lilly as possible replacements. Palantir offers rapid growth but a very high valuation, while Eli Lilly is framed as a major beneficiary of the weight-loss drug market with strong earnings growth and a much lower multiple than in prior years.
Key takeaways
- The host says Amazon and Tesla have underperformed badly enough that they may not belong in the next version of the Magnificent 7.
- Nvidia still leads the group, with the host citing explosive expected EPS and sales growth even after a recent pause in the stock.
- Alphabet and Microsoft remain core AI winners, in the host’s view, because both still show strong growth at large market caps.
- Tesla looks most vulnerable to removal because analysts expect earnings to fall in 2025 and the stock trades at a forward P/E around 200.
- The host thinks Palantir and Eli Lilly could replace some laggards if their growth trajectories continue.
- Apple is still a huge winner historically, but the host says its current growth does not justify its valuation as well as before.
Notable quotes
“the Shine is uh coming off of the Mag Sevens now. we are going to get some other kind of designation possibly here in 2026”
“Amazon the worst performer. Tesla not so great either”
How the episode opens
Stocks, bonds, ETFs, straight out of downtown Chicago. This is Zach's Market Edge. Welcome to Zach's Market Edge, the podcast about investing in your life.
I'm your host, Tracy Reinick, and this week I'm going solo to talk about the MAG 7. Is it still a thing? Has it lost its shine?
I want to say I did this podcast last year because things were looking a little dubious then as well, but now that we're in 2026, I thought I'd take a closer look because normally these are the stocks we've been turning to when the calendar turns the page. But this year, are they what is really going on beneath the surface? Now, if you recall, we've had several different renditions of the Mag 7, and the other two of them have gone away.
First we had the fang stocks and those were similar to the Mag Sevens but without Tesla. Then they wanted to add in um I guess it was Netflix they wanted to add in there. So then we had Fangman.
We had that but then Netflix wasn't doing too hot and people got bored of that. And so then we got the Mag 7 because they wanted to add Tesla back in and there was no way to make a word with adding in the T apparently. So we just got these magnificent seven stocks and let's recall what they are now.
Uh so there's Nvidia, there is Alphabet. I'm looking at my list to make sure I'm getting them all. There's Meta Platforms, there's Apple, there's Microsoft, there's Tesla, and there's Amazon.
So, that's who's making up the MAG 7. They are most of the trillion dollar market cap companies, but not all of them. Now, we do have a few others that are now not in the Mag 7s, but they're all in technology in some way.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- magnificent 7 rotation
- stock underperformance
- replacement picks
- amazon performance
- tesla performance
Companies and tickers mentioned
- AMZN
- TSLA
- Amazon
- Tesla
Watch the episode
Watch “The Magnificent 7 is Over: What Stocks Will Replace It?” on YouTube
Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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