Magnificent Seven Still Hold 35.7% of S&P as Four Stocks Slip on Earnings
The Magnificent Seven’s combined S&P 500 market-cap weight dipped only from 36.9% to 35.7% despite four members falling post-earnings this season. AI spending by hyperscalers is forecast at $650 billion this year, underscoring continued vendor revenue potential ahead of Nvidia’s Feb. 25 report.
1. Magnificent Seven Market-Cap Dominance
At the start of the year the Magnificent Seven represented 36.9% of the S&P 500’s total market capitalization, and as of Thursday’s close that figure has only edged down to 35.7%, highlighting the group’s enduring influence on index performance.
2. Earnings-Driven Stock Movements
In this quarter’s reports, Microsoft, Tesla, Amazon and Alphabet all saw share declines, Apple barely gained 0.5%, Meta was the only major share gainer, and Nvidia’s fiscal earnings release is set for February 25.
3. Hyperscaler AI-Driven Spending
Big Tech and hyperscale cloud providers are projected to spend around $650 billion on infrastructure this year, fueling revenue opportunities for semiconductor and hardware vendors tied to AI deployments.
4. Broader Market Reaction
Despite the tech rotation narrative, the Nasdaq Composite rose 1.5%, the S&P 500 climbed 1.4% and the Dow surged 1.8% as investors bought the pullback in major tech stocks.