No Investment Strategy Works Forever—Not Even for the Mag 7

Tesla’s contribution to the S&P 500 dropped nearly 6% in the first half of this year. (Omer Messinger/Getty Images)

About the writer: Allan Sloan is an independent business journalist and seven-time winner of the Loeb Award, business journalism’s highest honor.

Allow me to let you in on one of Wall Street’s bigger open secrets: There is no simple one-step strategy designed to produce an above-market return that will work in perpetuity. You can match a market’s (or a segment’s) return by using index funds, but trying to outperform the market every year by using the same simple strategy continuously isn’t going to work.

That is because on Wall Street, nothing is forever.

A case in point is trying to beat the market by buying the stock of the Magnificent Seven companies— Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia, and Tesla. The Mag Seven name, introduced to the investing world by Bank of America market maven Michael Hartnett in May 2023, caught on in a flash and has become part of the investment lexicon. And investment products have been designed around it.

The name is taken from the classic 1960 movie The Magnificent Seven, a Western starring Yul Brynner, Steve McQueen, Charles Bronson, and four others whose characters are hired to protect a Mexican village from a group of bandits. Which they manage to do, albeit at substantial cost.

And just as the movie was a big success, so was buying stock of the Magnificent Seven companies in 2023 and 2024. These companies are actually eight stocks because Alphabet has two publicly traded share classes.

As you can see, the Seven substantially outperformed the other 493 members of the S&P 500 in both 2023 and 2024.

Created with Highcharts 9.0.1The 7 Were Once MagnificentThe Magnificent 7 contributed more to the S&P 500’s total return in 2023 and 2024​than the companies’ collective weight in the index.Source: S&P Dow Jones Indices

Created with Highcharts 9.0.1Combined contributionsCombined weight202320240%10203040506070

The Seven batted way above their index weight in both years, accounting for a disproportionately large percentage of the S&P’s total return. (Total return consists of share price changes and reinvested dividends.)

Oops. Then came this year. Or at least, the first seven months of it, a period during which the Seven haven’t been even remotely Magnificent.

To be sure, two of the Seven—Nvidia and Microsoft—have batted way above their weight. These Terrific Two accounted for almost half of the S&P’s 8.59% total return for the first seven months of the year. That is more than triple their combined July 31 index weight of 15.46%.

Created with Highcharts 9.0.1The Terrific TwoNvidia and Microsoft contributed nearly half of the S&P 500’s total return in the first​seven months of 2025.Source: S&P Dow Jones Indices

Created with Highcharts 9.0.1ContributionWeightNvidia Microsoft Meta Amazon Tesla Alphabet A&BApple Total-20-10010203040-30%

Throw in Meta, the only other Seven member to bat above its weight so far this year, and the Big Three accounted for a whopping 57.55% of the S&P’s return through July. That is slightly more than triple their combined weight of 19.11%.

That is the good news. However, three of the remaining Seven—Tesla, Alphabet (both share classes) and Apple, which had a mega-rotten seven months—all fell in price, reducing the S&P’s return.

As a result, the No-Longer-Magnificent Seven have collectively batted way below their weight so far this year.

Given what a terrific year 2025 has been for stocks, which are setting one new high after another, there’s no way to tell how the Seven—or the market as a whole—will perform for the final five months of the year.

But the one thing that is clear from the reversal of the 2023-24 numbers is that parking your money in the Seven’s eight stocks and expecting to substantially outperform the market has stopped working. And may never work again.

It has been a lot of fun watching the Seven for the two-plus years that the term has resonated in the financial markets. And in 2023 and 2024, it was a lot of fun investing in the Seven as well.

The lesson we should take from the Seven’s underperformance so far this year is that expecting the simplistic strategy of Put The Seven In Play And Go Away to outperform the market no longer makes any sense. If it ever did.

One of these days, I’m sure, some new “can’t-miss” strategy will appear—and may even work for a while. But as the no-longer-Magnificent Seven’s performance this year shows us, when it comes to Wall Street, yesterday’s fad can become today’s fiasco.

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