Magnificent 7: how will tariffs impact big tech stocks?

Big tech stocks, in particular the ‘Magnificent Seven’, have dominated the stock market for over two years, but their share prices have become highly volatile as Donald Trump’s tariffs threaten to upend the established economic order.

At the start of 2023, seven tech companies accounted for approximately a fifth of the S&P 500 between them. Two years on – having been constantly among the most-bought stocks in the world ever since – the group, dubbed the ‘Magnificent Seven’, now comprises over 30% of the S&P 500 index.

This saturation means that, in effect, all investors are exposed to these big tech stocks. Whether or not you own them directly, any stock market tracker funds, the likes of which will likely form a large part of your pension, will have significant exposure to the Magnificent Seven group.

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Stock markets have recently nosedived, though, thanks to Trump’s ‘Liberation Day’ tariffs. As some of the pricier offerings in the stock market, the Magnificent Seven initially bore the brunt of this selloff.

The tech industry is particularly on edge at the moment given the lack of clarity over all-important semiconductor imports.

While it looked, on Friday 11 April, as though semiconductors would be exempt from higher ‘reciprocal’ tariffs, Trump stated two days later that industry-specific tariffs would be brought about, and that the apparent exemption was due to the industry being moved to a different tariff “bucket”.

“What's caught investors' attention is the news that [chips, smartphones and other tech components] won’t be hit with the harsh China-specific tariffs,” says Matt Britzman, senior equity analyst at Hargreaves Lansdown.

“Instead, it looks like an existing 20% tariff will be applied - at least for now - while further decisions around how best to deal with this bucket of products go on in the background.”

“The mass confusion created by this constant news flow out of the White House is dizzying for the industry and investors,” says Dan Ives, global head of technology research at Wedbush Securities, “creating massive uncertainty and chaos for companies trying to plan their supply chain, inventory, and demand.”

Should you be worried about increased volatility in the Magnificent Seven over recent weeks? Is this just a flash in the pan – or is the AI boom bursting like the dotcom bubble did twenty-five years ago?

What are the Magnificent Seven stocks?

The Magnificent Seven – often abbreviated to ‘Mag7’ – comprises seven big tech stocks that the investing community perceives as being the leading exponents of technology in general and artificial intelligence (AI) in particular.

They are:

• Alphabet (NASDAQ:GOOGL) – the parent company of Google, as well as other companies such as the AI developers DeepMind and Anthropic;
• Amazon (NASDAQ:AMZN) – originally an online bookstore, now a giant of e-commerce and, via Amazon Web Services (AWS), cloud computing;
• Apple (NASDAQ:AAPL) – the tech hardware company that brought the world the MacBook and the iPhone;
• Meta (NASDAQ:META) – formerly Facebook, the company is now heavily focused on ‘Metaverse’ technology as well as AI products, like Llama model;
• Microsoft (NASDAQ:MSFT) – the computing giant behind the Windows operating system and the Azure cloud platform;
• Nvidia (NASDAQ:NVDA) – the hardware developer that pioneered GPUs, the chips that power AI data centres;
• Tesla (NASDAQ:TSLA) – the electric vehicle (EV) manufacturer that, according to CEO Elon Musk, is aiming to crack autonomous driving.

The term ‘Magnificent Seven’ was coined by Bank of America analyst Michael Hartnett in 2023. By then, the group was already starting to dominate the stock market in the wake of the AI and tech stock mania that followed the public launch of ChatGPT in late November 2022.

While each company is distinct, there are some general similarities that apply to most, if not all, of the group.

All are (or at least have been) incredibly innovative; Apple’s products have revolutionised personal computing, Meta made social media mainstream, and Tesla has demonstrated the viability of EVs.

Most are also highly diversified. Even if a specific product made a company like Meta or Amazon famous, these megacap companies now have their fingers in all sorts of technological pies – favourites being cloud computing and, of course, AI.

All the companies in the group are involved in AI, albeit in different ways and to varying degrees (Apple, for example, has drawn criticism for failing to develop its own AI products as fast as its counterparts).

Their key similarity, though, is their stock market dominance. At the time of writing, they comprise seven of the world’s eleven largest companies by market capitalisation. All except Tesla have a market cap of over $1 trillion (Tesla’s has fallen from $1.4 trillion at the end of December to $811.33 billion at the time of writing).

Latest Magnificent Seven News

The Magnificent Seven were initially hammered by the stock market selloff that has followed Donald Trump’s imposition of far-reaching tariffs on US imports.

Apple – whose iPhones are mostly produced in China which is subject to tariffs of 145% – fell 9.3% on 3 April, immediately following ‘Liberation Day’. Amazon and Meta both fell 9.0%.

The stocks were already under fire this year following the emergence of Chinese AI start-up DeepSeek, and the tariff turmoil is presenting fresh headwinds for all seven stocks.

However, as the tariff situation has unfolded – with Trump having announced a 90-day pause on reciprocal tariffs on imports from all countries besides China – the stocks have swung dramatically. Their total share price change between 2 April (immediately before the first tariff announcement) and 11 April are below:

It’s clear that the tariff story has impacted the seven stocks very differently. Companies like Apple and Tesla, both of whom have strong links to China both for product sales and production, have taken the biggest hits so far.

Others, though, haven’t come off too badly. Alphabet, Nvidia and, most notably, Microsoft, are now trading above where they were before the tariff turmoil began.

Alphabet

With the tariff regime on computing products in flux, it would be understandable for big tech companies to take a conservative approach to capital expenditure predictions.

Alphabet has bucked that trend, with CEO Sundar Pichai reaffirming the company’s commitment to spending $75 billion this year to expand its data centre capacity.

“The opportunity with AI is as big as it gets,” Pichai said at Google Cloud Next 25. “That’s why we are investing in the full stack of AI innovation”.

Amazon

Amazon’s core e-commerce business and its supply chains are highly globalised, so are especially vulnerable to the potentially inflationary impacts of tariffs.

CEO Andy Jassy has warned that the prices consumers pay for goods on its site will rise, and Bloomberg reports that orders for some products made in China or Asia have been cancelled.

Amazon had previously announced plans to launch the first 27 satellites for Project Kuiper, its space-based internet network, on 9 April. However, the launch had to be canceled due to cloudy weather conditions causing a risk of lightning strikes.

Apple

Trump’s tariff announcements wiped $300 billion off Apple’s market capitalisation on 3 April.

China is both the world’s largest smartphone market and a key location in the iPhone supply chain. As such, the ratcheting trade war between China and the US spells bad news for Apple.

A potential exemption for tariffs on computer hardware products could provide some respite for Apple, but until the precise nature of the tariff regime is known, investors are likely to be jumpy about Apple.

All that said, it remains – as of 11 April – the largest company in the world by market cap.

Meta

While tariffs were hammering goods-based stocks in the ‘real economy’, you might have assumed that all was reasonably well in the metaverse.

Unfortunately for Zuckerberg and co, the tariff news coincided with news that its head of AI research, Joelle Pineau, was leaving the company.

Shares fell 9.0% on 3 April in response. The days of Meta’s record-breaking winning streak now seem far behind.

Additionally, this week sees the beginning of an antitrust trial that could see Meta forced to sell Instagram.

Microsoft

Microsoft has seemingly weathered the tariff storm best of all the Magnificent Seven stocks so far.

Some analysts think this is due to its large cloud computing segment and the fact that much of its revenue comes from enterprise clients tied into long-term contracts. The former will be relatively untouched by tariffs (which only apply to goods, not services) and the latter will give its revenue streams a degree of resilience over the near term, while the uncertainty persists.

Nvidia

Shares in Nvidia have see-sawed since 2 April but the stock is now trading marginally above its Liberation Day close.

As with Apple, the long term fallout for Nvidia will depend on the specific tariff regime that applies to semiconductor products and components, with most of its supplies coming from Taiwan, which had a 32% reciprocal tariff applied before Trump’s pause.

Tesla

Tesla’s share price was already swinging wildly before tariffs were imposed, thanks to the announcement of woeful Q1 delivery numbers – its worst since 2022.

CEO Elon Musk, who is closely associated with the Trump administration thanks to his activity with the Department of Government Efficiency (DOGE), has made the company a target among Trump’s opponents.

However, rumours that Musk could step back from his work at DOGE within weeks saw Tesla’s share price recover, before the tariff fallout erased these gains.

Is now the time to buy the Magnificent Seven?

Given all the chaos, should you buy the Mag7 stocks?

The answer of course depends on your personal circumstances, investment goals, and risk appetite, but before investing in big tech stocks it is worth remembering that their oversaturation in the stock market and strained valuations mean that they are relatively risky investments, despite the fact that they are big, established and highly profitable businesses.

However, for those who still believe that their business models will thrive in the long term, the selloff could mark a buying opportunity for the Magnificent Seven stocks.

The table below shows the price of these stocks relative to their earnings over the last 12 months (trailing) and analysts’ projections for the next 12 (forward). Note that some of this data pre-dates the tariff selloff.

^{Sources: *Wall Street analyst estimates via stockanalysis.com as of 4 April 2025, ^Birinyi Associates analysis via Wall Street Journal as of 28 March 2025}

Anyone who had previously felt the Magnificent Seven were overvalued based on their fundamentals might look on them more favourably now – though it is worth noting that their valuations in this table account for day one of the post-tariff selloff, while those for the indices don’t.