Magnificent 7 Stocks: 2025 Key Insights
Written by
John Csiszar
Edited by
Nupur Gambhir
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Wall Street loves its acronyms. In 2017, one of the most famous in recent existence, “FAANG,” was coined by commentator Jim Cramer, and it referred to five of the most popular and market-moving stocks of the time: Facebook, Amazon, Apple, Netflix and Google. While two of those stocks have undergone name changes — Facebook to Meta Platforms, and Google to Alphabet — they are still among the market leaders when it comes to tech stocks.
See: 3 Things You Must Do When Your Savings Reach $50,000
To update the list of tech stock leaders for 2023, analyst Michael Hartnett of Bank of America coined a new term, the “Magnificent 7,” referring to the best-performing tech stocks of the year. This list is almost identical, using the FAANG stocks but dropping Netflix and replacing it with Nvidia, Microsoft and Tesla.
What Are the Magnificent 7 Stocks?
In addition to being leading tech stocks, the Magnificent 7 dominate the S&P 500, representing seven of the largest eight stocks in the S&P 500 as of Feb. 20, 2025. According to Slickcharts, these seven stocks comprise more than 30% of the entire S&P 500 index.
Here’s a look at the Magnificent 7 stocks, including their prices, one-year performance, market capitalization, dividend yield, and average analyst price target 12 months out.
| Stock | Price as of Feb. 21, 2025 | One-year performance | Market capitalization | Dividend yield | Price Target |
| Alphabet (GOOG) | $181.58 | 26.69% | 2.2 trillion | 0.43% | $218.72 |
| Amazon (AMZN) | $216.58 | 28.47% | 2.295 trillion | N/A | $266.48 |
| Apple (AAPL) | $245.55 | 35.32% | 3.689 trillion | 0.41% | $252.23 |
| Meta Platforms (META) | $683.55 | 46.45% | 1.732 trillion | 0.30% | $762.74 |
| Microsoft (MSFT) | $408.21 | 2.07% | 3.035 trillion | 0.80% | $508.05 |
| Nvidia (NVDA) | $134.43 | 99.29% | 3.292 trillion | 0.03% | $172.22 |
| Tesla (TSLA) | $337.80 | 73.44% | 1.087 trillion | N/A | $342.58 |
Although the Magnificent 7 are all household names, here’s a quick overview of each one’s industry and claim to fame:
- Alphabet: Formerly known as Google, Alphabet is the king of search. It also provides an extensive range of other consumer-friendly services, from Gmail and Maps to Flights, document creation and more. As with most of the companies on this list, AI is powering its future growth.
- Amazon: Amazon is the world’s largest online retailer and the gold standard when it comes to getting anything you want as soon as possible, sometimes in a matter of a few hours.
- Apple: Apple creates some of the most popular consumer technology in history, from the iPhone and iPad to Airpods, the Apple Watch, and even Apple TV.
- Meta Platforms: Meta Platforms is the company formerly known as Facebook, and remains its driving business. However, it actually owns and operates a wide variety of social media and virtual reality platforms, from Instagram and WhatsApp to Messenger and Oculus.
- Microsoft: Microsoft was one of the original pioneers of the modern technological age, with its ubiquitous Windows platform transforming personal computing. It is know a full-service technology company offering hardware, software, services and cloud solutions to individuals and businesses alike. The company keeps reinventing itself and is currently moving into generative AI as well.
- Nvidia: Nvidia may be the least well-known name to the average American on this list, but it’s been the best-performing stock in the S&P 500 over the past 5-, 10-, 15- and 20-year periods, making many shareholders wealthy along the way. The company is at the forefront of the AI movement, making best-in-the-business graphical processing units — which it invented — and AI computer chips. As that industry grows, so too will Nvidia.
- Tesla: Tesla is the global leader in electric vehicle production and sales. However, it’s also focused on technologically advanced energy generation and storage.
Why the Magnificent 7 Stocks Are Important
The impact of the Magnificent 7 on the overall market cannot be overstated. Although Tesla has recently slipped to the eighth-largest stock in the index, the Magnificent 7 frequently are the top-7 stocks in the S&P 500. With a collective weighting of more than 30% of the index, this means that as these stock trades, so too does the market overall, generally speaking.
There’s a psychological component to this as well. As the largest — and some would say, most exciting — stocks in the S&P 500, the names of the Magnificent 7 are constantly tossed about in the financial press, with analysts and investors alike tuned into their performance. When Apple and Nvidia are trading up in value, investors tend to bid up the rest of the market as well.
In fact, due to their sheer size, if you own a stock mutual fund, you likely already own some or even all of the Magnificent 7. Portfolio managers of stock funds are all but forced to buy these stocks just so they can keep up with the market and their peers. Thus, it seems like almost everyone is rooting for these stocks to succeed.
Beyond the stock market, however, the Magnificent 7 are important for what they do. These companies didn’t become the largest in the world just because investors want to own their shares. They are also the world’s leading firms when it comes to things like innovative artificial intelligence technology and consumer products that are light years ahead of where they were just a few years ago. These companies create world-changing technology and infuse it into their product lines, bringing the world into a new age.
How To Invest in Magnificent 7 Stocks
There are two ways you can invest in the Magnificent 7 stocks: by purchasing the stocks individually or by owning ETFs or mutual funds that own them.
With direct stock investments, you participate directly in ups and downs of each company. While the Magnificent 7 often follow a similar trend, they don’t mirror one another. Buying the stocks individually can take some time and research but can allow you to pick and choose which of the stocks you expect will outperform.
If you don’t want to do the research yourself, you can invest in any number of mutual funds or ETFs that own the Magnificent 7. In fact, any major growth stock fund, including an S&P 500 index fund, will own most or all of the Magnificent 7. These types of funds offer the benefits of professional management and diversification, providing exposure to the Mag 7 without putting all of your eggs into one basket. For focused exposure, you could pick up shares in an ETF devoted solely to these seven stocks, such as the Roundhill Magnificent 7 ETF (MAGS).
Risks of Investing in Magnificent 7 Stocks
One of the reasons that the Magnificent 7 stocks dominate the top 10 of the S&P 500 is that their performance has been absolutely remarkable in recent years. Taken as a group, the Mag 7 have soundly defeated the returns of the overall market. But this success hasn’t come without volatility. Nvidia, for example, has been the best-performing stock in the entire S&P 500 for the past 5-, 10-, 15- and 20-year periods, a remarkable record. But many shareholders actually lost money and got scared out of the stock when it plummeted over 50% in 2022 alone. In other words, with high potential upside also comes high risk and volatility.
Another risk of owning the Magnificent 7 stocks is that your portfolio may be over-concentrated. Although many of these stocks are technically in different industries, they are all large-cap growth tech stocks. Overall, they tend to trade more or less in tandem. By owning just a few companies that tend to trade in sync, your portfolio will not be diversified and could suffer mightily in a general market turndown.
Although the Magnificent 7 have been among the most successful companies in history, this doesn’t mean they don’t have challenges ahead. Regulatory issues are one of the most significant, as governments around the world are constantly seeking to rein in the biggest tech companies when it comes to issues like privacy and data collection. And as the biggest and most successful companies in their industries, there are countless upstart competitors that are seeking to take away market share and do the things these companies do better.
Future Outlook for the Magnificent 7
Overall, the future looks bright for the Magnificent 7. There’s a reason why these are the most successful tech companies in the world — they have strategic vision, they innovate, and they have massive R&D budgets. And as successful as these companies have been, they might be poised to reach new levels of profitability, as artificial intelligence is only just beginning to take off.
Apple, for example, is more of a slow grower, but its cash flow is both exceptional and predictable. Morningstar sees the company growing 7% annually through 2029, on the back of its consistent iPhone revenue and its expansion into AI and augmented reality.
Nvidia, the best-performing stock over nearly any recent time period, looks better positioned than almost any company to capture the exponential growth in the AI world.
And the other Magnificent 7 stocks look to continue dominating their industries for years to come. It will be hard if not impossible, for example, for any retailer to topple Amazon’s online presence, or to replace Tesla as the world’s leader in electric vehicles.
However, it’s important to note that much of this growth may already be priced in. As of Feb. 20, 2025, the stock market as a whole is what analysts refer to as “priced for perfection,” and the Mag 7 are leading the way. Investors may want to be cautious at current levels and wait for better entry points.
Should You Buy the Magnificent 7 Stocks?
The Magnificent 7 have lived up to their name through a combination of outstanding market performance and technological innovation. When people think of electric vehicles, for example, they likely think of Tesla. When they think of online shopping, they think of Amazon. And no one tops Apple when it comes to high-tech consumer gadgets that seemingly everyone loves.
But whether or not the Magnificent 7 are still a good investment is up to debate. Some analysts and investors consider them overbought and overvalued in the current market, as they have, by and large posted stratospheric gains over recent years. But others point to the emerging growth engine of artificial intelligence, not to mention the market-leading position of these companies, as just a few reasons why they have plenty more room to run. To determine if you should own any or all of the Magnificent 7, do your own research and ensure that they match your investment objectives and risk tolerance. Or, if you feel you need some guidance, consult with a financial advisor.
Data is accurate as of Feb. 21, 2025, and is subject to change. Information on analyst ratings and prices was sourced from Yahoo Finance.
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