QUICK SPARK: S&P 493 Hammers Magnificent Seven in the Year of the Underdog

An exchange-traded fund holding the S&P 500 minus those seven names is outperforming the Magnificent Seven group by nearly 17 percentage points this year. 9% year to date. 7%. Thursday amplified the gap.

63% after Alphabet Inc. (NASDAQ: GOOGL ) raised its 2026 capital expenditure guidance — the money a company spends on data centers, chips and other long-lived assets — to a range of $195 billion to $205 billion from $180 billion to $190 billion. Tesla Inc. (NASDAQ: TSLA ) missed on earnings, with free cash flow turning negative.

52% on the day. 13%. Last year the trade ran the other way. 63% for XMAG.

QUICK CONTEXT: Magnificent Seven Lose Their Market Grip The Magnificent Seven have stopped carrying the market in 2026. 2% over the same period. The weakness is uneven but severe. Tesla had fallen about 29%, Microsoft nearly 21% and Meta 8%.

Alphabet and Amazon were barely positive. 5%, and Nvidia, up 12%, were the only clear winners by a wide margin, leaving the group increasingly dependent on two stocks. 7%. Alphabet and Tesla led the decline, putting fresh attention on whether enormous commitments to artificial intelligence, data centers, robotaxis and robotics can generate adequate returns for future shareholders.

S. indexes. Their earlier gains made benchmarks unusually dependent on a small technology cluster; their 2026 underperformance has broadened market leadership. Investors are no longer rewarding AI spending automatically.

They want clearer evidence that escalating investment will produce durable cash flow and profits. Image: Shutterstock