Mag 7 divide could widen in 2026 as Amazon, Meta, Apple lag year-to-date

Core Insights - The market has shifted from treating the "Magnificent Seven" tech companies as a unified group to evaluating them individually based on their ability to monetize AI investments [1] - Alphabet leads with a significant advantage due to its AI chip distribution and LLM Gemini, outperforming competitors in key benchmarks [2] - Nvidia has become the world's most valuable public company, with over 40% growth, driven by its role in the record-breaking data center buildout [2] Winners - Alphabet is recognized for its strong position in AI, with a 60 percentage point lead in credibility across the tech stack [1] - Nvidia's growth and valuation are attributed to its foundational role in AI infrastructure, particularly in data centers [2] Laggards - Amazon, while maintaining the largest cloud business, is experiencing slower growth in AWS compared to Azure and Google Cloud, raising concerns about its in-house AI chip's adoption [3] - Meta lacks a cloud service and a clear revenue model linked to its AI investments, making it difficult to justify its ROI to investors [4] - Apple is focusing on consumer distribution rather than infrastructure, which may impact its competitive position if AI model quality continues to converge [5] Market Dynamics - Capital expenditure (capex) for top hyperscalers exceeded $400 billion this year, with projections suggesting it could surpass $600 billion next year, primarily for AI infrastructure [6] - Apple is spending significantly less on AI infrastructure, around $3 billion in the most recent quarter, indicating a potential gap in investment compared to competitors [7] - Azure has a future performance obligation of $400 billion, compared to Amazon's $200 billion, highlighting where enterprises are placing their bets [8]