Magnificent Seven latest: What does Musk’s row with Trump mean for big tech stocks?

Big tech stocks, in particular the ‘Magnificent Seven’, have dominated the stock market for more than two years.

Many thought Donald Trump’s second term as US president would be a boon for the Magnificent Seven, which are consistently among the world’s most-bought stocks. After all, the president had every appearance of being pro-business, and Silicon Valley was particularly excited by his apparently pro-crypto attitude.

Tesla in particular was seen as a huge beneficiary thanks to CEO Elon Musk’s close relationship to Trump and his extravagant financial backing of the election campaign. But as Tesla’s share price slumps in response to a row between the world’s richest man and its most powerful, questions are being raised over the implications for other tech stocks.

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“Trump has… talked of ‘consequences’ for the Tesla founder, whose wider business interests, including SpaceX, rely on many billions of dollars of Federal spending,” says Susannah Streeter, head of money and markets at Hargreaves Lansdown. “While there is speculation that Elon Musk’s attitude could open the door to more criticism from big tech names, some will also see it as a warning of the retribution which could be handed out by the administration if Trump is crossed.”

At the start of 2023, seven tech companies accounted for approximately a fifth of the S&P 500 between them. Two and a half years on, the group, dubbed the ‘Magnificent Seven’, now comprises over 30% of the 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.

But the stocks have been rocked this year, first by the emergence of Chinese AI start-up DeepSeek, then by Trump’s trade tariffs that sent stock markets into a tailspin. With tensions ramping up between the White House and big tech, what is the current outlook for the Magnificent Seven?

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 nine largest companies by market capitalisation. All have a market cap of over $1 trillion, except Tesla – the EV manufacturer’s recent share price slump has brought its market cap down to just over $950 billion at time of writing.

Latest Magnificent Seven news

Most of the Magnificent Seven companies are navigating a much more complex political world. As the potential disruption from tariffs as well as Musk’s clash with Trump highlight, these big tech giants must tread carefully, all while trying to stay ahead of one another in the development of the leading AI technology of the future.

Alphabet

Despite fears that generative AI (genAI) search could eat into the efficacy and popularity of Google Search, still the core of Alphabet’s business despite its fast-growing cloud arm, the division posted solid year-over-year growth of 9.8% in Alphabet’s latest earnings release.

Concerns linger over a potential breakup of Google, though. The US Department of Justice (DOJ) is pushing for Google to divest the Chrome browser and parts of its advertising technology (adtech) infrastructure, with a judge having ruled in August last year that Google has illegally monopolised the online search market.

On 2 June, Reuters reported that Google will appeal a recent ruling on proposals to restore online search competition.

“We will wait for the Court’s opinion… we still strongly believe the Court’s original decision [that Google constitutes a monopoly] was wrong, and look forward to our eventual appeal,” Google posted on X.

Alphabet continues to spend big on AI infrastructure, 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

The tariff situation weighs heavily on Amazon, given the globally diversified nature of its core e-commerce business.

“While the company delivered a strong profit beat in the quarter, guidance for 2Q growth and operating income were mixed, as management contemplates a broader range of outcomes given macro uncertainty and the potential tariff implications on the business,” says Scott Devitt, managing director at Wedbush Securities following Amazon’s latest earnings release.

While Devitt believes “there is some conservatism embedded in management’s outlook”, markets are clearly cautious about piling into Amazon stock while the implications of the trade war for the company remain uncertain.

Apple

Apple’s CEO Tim Cook has already received multiple knuckle-raps from Trump over its iPhone supply chain. Given the belligerent mood in the White House, Cook will want to stay on the president’s good side; but that is easier said than done given the globally diversified nature of its business.

The challenge for Apple is that its iPhone is almost entirely manufactured in China. While the most extreme US-China tariffs have been temporarily paused, a return to the previous 145% tariffs on imports to the US from China could, in some experts’ opinion, increase the cost of an iPhone to as much as $2,300. CEO Tim Cook told analysts during Apple’s earnings call that the tariffs as they stood at the time could add $900 million to Apple’s costs during Q2.

Apple attempted to circumnavigate the stringent China tariffs by boosting its operations in India; this earned a swift rebuke from president Trump, who claims to have told Cook “I don’t want you building in India” and that the company will be “upping their production in the United States”.

Apple’s Worldwide Developer Conference (WWDC) takes place this week (9-13 June) and Bloomberg cites company insiders who believe that little is in store to reverse the prevailing narrative that Apple is behind competitors like Google and OpenAI when it comes to genAI innovations.

Read more about the biggest winners and losers from Trump’s tariff announcements here.

Meta

Meta is one of the Magnificent Seven companies least-impacted by tariffs, and CEO Mark Zuckerberg has been keen to ingratiate himself with Trump since the president’s return to power.

The firm has cut DEI programs, and in its Q4 earnings release Zuckerberg told investors: “We now have a US administration that is proud of our leading companies, prioritises American technology winning and that will defend our values and interests abroad, and I am optimistic about the progress and innovation that this can unlock.”

Meta is also at the forefront of AI investing. Shares opened 1.3% higher on 29 May after Zuckerberg announced that Meta AI now has 1 billion monthly users across all Meta’s apps.

On 8 June, Bloomberg reported that Meta is in talks to invest $10 billion or more into Scale AI, a start-up that provides data labelling services to help companies like Microsoft and OpenAI train machine learning models.

Microsoft

The figures involved in Meta’s potential investment into Scale AI are similar to the amount that Microsoft has invested into OpenAI.

Microsoft’s CEO Satya Nadella revealed recently that this investment is already generating revenue for Microsoft. Speaking to Bloomberg’s ‘The Circuit with Emily Chang’, Nadella said that “every day that ChatGPT succeeds is a fantastic day for Microsoft”, confirming that Microsoft makes money from every search carried out on ChatGPT.

At London Tech Week on 9 June, Microsoft confirmed a partnership with Barclays to roll out its Copilot AI assistant to more than 100,000 of the bank’s employees.

Nvidia

During its Q1 earnings release, Nvidia registered a $4.5 billion one-off loss during the quarter related to the restrictions on semiconductor exports to China which came into effect during the quarter.

CEO Jensen Huang appeared to criticise these controls during the earnings call, saying that the $50 billion Chinese market was effectively closed to the company and that “China’s AI moves on with or without us… The question is not whether China will have AI; it already does. The question is whether one of the world’s largest AI markets will run on American platforms.”

Elsewhere though, Huang was careful to talk up the president’s policies. “President Trump has outlined a bold vision to reshore advanced manufacturing, create jobs and strengthen national security,” clearly eager not to write himself into the president’s bad books.

Elsewhere, Nvidia announced a partnership with the UK to build out the country’s AI infrastructure at the opening of London Tech Week on 9 June. The initiative will involve supporting AI skills training and the rollout of an AI innovation sandbox with the Financial Conduct Authority (FCA).

Tesla

Tesla’s shares fell 14.3% on 5 June, marking the largest single-day fall in market cap in the company’s history, as a war of words unfolded on social media between Musk and Trump.

Trump threatened to cut off funding for Musk’s companies, which is a distraction that Tesla could do without. Bloomberg has reported that the long-awaited launch of the robotaxi is hoped to take place on 12 June.

With so many commitments on his plate, can Musk navigate through a challenging period for both Tesla and his own relationship with the White House? Read more here: Who’s driving Tesla?

Is now the time to buy the Magnificent Seven?

The valuations of the Magnificent Seven go up and down, but many investors feel they are overvalued. Are the Magnificent Seven a good buy?

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.

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).

^{Sources: *Wall Street analyst estimates via stockanalysis.com as of 6 June 2025, ^Birinyi Associates analysis via Wall Street Journal as of 6 June 2025.}

A degree of lustre has, on the whole, returned to the Magnificent Seven stocks following earnings season. All except Alphabet are trading above the average forward P/E of the S&P 500, while investors are also optimistic about Tesla, Microsoft and Amazon in relation to the index.

Value-focused investors may look favourably at Nvidia, Apple, Meta and Alphabet’s current valuations, being in-line with or below the average of the NASDAQ 100.