Yahoo Finance·2026-01-26 15:18Core Insights - In 2025, only two of the Magnificent 7 tech stocks, Alphabet and Nvidia, outperformed the S&P 500, while the other five (Amazon, Apple, Meta Platforms, Microsoft, and Tesla) lagged behind [1][2] - The Bloomberg Magnificent 7 Index rose by 25% in 2025, compared to a 16% increase for the S&P 500, primarily driven by the strong performance of Alphabet and Nvidia [2] - As of January 23, 2026, the CNBC Magnificent 7 Index is slightly down, contrasting with a 1% increase in the S&P 500, indicating potential ongoing challenges for the Magnificent 7 stocks [3] Performance Analysis - The majority of the Magnificent 7 stocks underperformed the S&P 500 for the first time since 2022, highlighting a shift in market dynamics [2] - Experts suggest that the sluggish performance may continue due to slowing profit growth and concerns regarding heavy investments in artificial intelligence [3] Investment Strategy - Investors are cautioned against viewing the Magnificent 7 as a single investment entity, as this approach may lead to concentrated risks rather than diversification [5] - Nvidia and Microsoft are identified as the best positioned for potential growth in 2026, contingent on sustained enterprise AI spending [6]