The “Magnificent Seven” are no longer leading the US stock market. After years of dominance and outsized returns, the high-tech giants are being outpaced by the companies closest to the heart of the artificial intelligence infrastructure boom.
The Magnificent Seven—Apple AAPL, Microsoft MSFT, Amazon AMZN, Google parent company Alphabet GOOG/GOOGL, Facebook parent company Meta Platforms META, Tesla TSLA, and Nvidia NVDA—have gained just 5.5% this year through July 13 on a cap-weighted average basis. Together they weighed down the broader market, which is up 10.6% over the same period as measured by the Morningstar US Large-Mid Cap Index.
Leading the market instead this year have largely been triple-digit returns in memory chip producers such as Micron Technology MU and Advanced Micro Devices AMD. Flash memory supplier SanDisk SNDK has been one of the biggest winners with its year-to-date performance of 605.2%.
To be sure, a few of the Magnificent Seven have helped boost overall market returns, with Apple and Nvidia providing positive contributions. Still, 2026 is on track to be their worst year since 2022.
Why Have the Magnificent Seven Suffered in 2026?
These stocks have recently gone their separate ways, each with its own drivers. For instance, Microsoft has been this year’s worst performer among the Magnificent Seven, down 20.4% through July 13. Morningstar senior equity analyst Dan Romanoff says that for much of the year, the firm has closely tracked the broader software group before lagging a bit after June’s software peak.
“Software in general has meaningfully underperformed as investment dollars flowed out of the space,” Romanoff says. “With Microsoft, there is an extra fear that all of the capex they are investing to build AI data centers may not earn a high enough return to justify the gigantic outlays.”
Meta investors have been worried about how the company would monetize its AI expenditures, according to Morningstar senior equity analyst Malik Ahmed Khan. “Investors are jittery right now,” he says. “On days when Meta presents a semi-coherent modernization angle, as they did recently with Muse Spark 1.1 for developers, the stock performs well.” He says investors aren’t paying attention to the revenue optionality Meta can tap into. “Improving ad efficiency, building new apps such as a Kalshi-like prediction markets app, selling compute—all that will help the firm to monetize their large AI investments.”
Tesla stumbled for different reasons. “Tesla shares have fallen due to expectations for a delay in the company’s robotaxi rollout versus the market’s expectations at the beginning of the year,” explains Morningstar senior equity analyst Seth Goldstein. “While Tesla has expanded and now offers its robotaxi service in 5 areas, the market was likely pricing in a faster pace of expansion.” He notes that Tesla also delayed its reveal of Optimus Gen 3, its latest humanoid robot. “Despite this, we’ve become more optimistic on Tesla’s outlook, particularly for robotaxi, the full self-driving autonomous software sold to Tesla owners, and Optimus.”
Some of the Magnificent Seven Have Emerged Relatively Unscathed
While the group has underperformed, a few of the stocks have held up. Apple (up 16.9% through July 13) and Alphabet (up 12.7%) have done the best. Nvidia also rose in line with the broader market.
The Magnificent Seven’s top performer this year has been Apple. After a bumpy start to 2026, it has risen 28.8% since April 1. “Apple has benefited from renewed AI bullishness this year, announcing its revamped strategy in June,” says Morningstar senior equity analyst William Kerwin. The other factor: “iPhone sales are growing in a big way this year. The iPhone 17 cycle is very strong, and that’s powering good fundamentals.”
Alphabet has also held up. The stock is up 12.8% in 2026 through July 13, even after sliding in late June after two senior AI researchers left for OpenAI and Anthropic.
Nvidia stock has slowed this year after gaining an eyewatering 1,177% in the three years through 2025, but it’s still risen 9.5% in 2026, roughly in line with the broader US market. “Investment dollars have flowed to other AI names where new technologies are being used in the buildout,” says Morningstar senior equity analyst Brian Colello. “With bottlenecks and shortages in server CPUs and memory chips, other companies are growing profits even faster than Nvidia,” he says. He qualifies that after the firm’s massive runup in 2023 and 2024, a slowdown this year was largely inevitable.
Which Stocks Have Actually Driven the Market in 2026?
At the industry level, semiconductor stocks have been the largest contributor by a wide margin. The industry has contributed 4.25 percentage points to the US Large-Mid Cap Index in 2026 through July 13, 40% of the index’s entire 10.6-point gain. “With the shortage in memory chips, price increases—and profits—have been massive,” Colello says.
Other leading industries included consumer electronics, which contributed 1.13 percentage points (10.7% of the index’s total rise), semiconductor equipment and materials, which contributed 1.05 percentage points, and computer hardware, which contributed 1.00 percentage points.
Memory and storage semiconductor giant Micron has been the top individual contributor through July 13, up 228.4%. The stock’s high-flying returns have helped it rise to become the seventh-largest company in the Morningstar Index, knocking Meta and Tesla down a peg.
Fellow semiconductor names AMD and Intel have also been leading contributors, with triple-digit returns. “AMD and Intel are benefiting from the rise of server CPUs associated with agentic AI,” Colello says. Demand for server central processing units has surged in recent months as newer agentic AI systems require more traditional data infrastructure alongside the graphics processing units that Nvidia is famous for.
Apple, Nvidia, and Alphabet still contributed some of the largest gains to the broader market in 2026. Other leading contributors all came from the semiconductor and computer hardware industries. Applied Materials AMAT, which supplies wafer fabrication equipment for semiconductors, is up 124.3% for the year through July 13, and competitor Lam Research LRCX rose 93.0%.
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