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RIP, Magnificent 7

Nearly everything that made the Magnificent 7 magnificent has disappeared.

3/17/25 3:18PM

I have lived through FANG, BAT, GRANOLAS, FAAMG, and enough others to know that the age of the Magnificent 7 is over.

Whatever we’re going through in markets — whether it’s a repair from healthy correction or a dead-cat bounce before the start of something worse — I’m fairly confident that coming out the other side of this, we won’t be talking about Apple, Microsoft, Nvidia, Alphabet, Amazon, Meta, and Tesla as some kind of collective.

Nvidia’s blockbuster earnings report in May 2023 didn’t just mark the unofficial kickoff for the AI stock market boom. Judging by references in news articles, this was also the time “Magnificent 7” began to live rent-free in investors’ heads.

Now, nearly everything that made the Magnificent 7 “magnificent” is fading. There were three components that underpinned the decision to group these stocks together:

They’re all megacap tech-adjacent stocks.
They were (mostly) growing earnings far faster than the S&P 500, and this was expected to continue.
They consistently outperformed the benchmark US stock index.

Well, No. 1 is still true, so there’s that.

But on the bottom line, there’s not across-the-board magnificence to speak of. For Tesla, there never was. Perhaps, to hearken back to the movie that bears the same name as this group of stocks, it’s the Josh Faraday of the bunch.

The premium earnings per share growth from most of these companies relative to the S&P 500 in 2024 is leading to some convergence in 2025, at best, and outright below-market earnings growth for others.

And the price performance that used to speak for itself now speaks volumes — in the other direction. On average, this is both the deepest decline for the cohort since it became popular as well as its largest underperformance versus the S&P 500.

Now only one member of the cohort — Meta — is outperforming the S&P 500 over the past three months, tying the lowest number since the end of May 2023.

The good news: there’s an infinite number of options to replace “Magnificent 7” in the market lexicon going forward.

Colleagues more creative than myself (like David Crowther, among many others) can now get to work dreaming up the next acronym that defines stock market dominance.

Luke Kawa3h

Corning spikes after Nvidia invests $500 million in the fiber-optics company

Corning is spiking after Nvidia dropped $500 million for the right to buy up to 18 million of its shares.

The deal comes as part of a multiyear partnership that will see Corning “increase its U.S.-based optical connectivity manufacturing capacity by 10x and expand its U.S. fiber production capacity by more than 50% to meet the accelerating demand driven by AI factory buildouts,” per the press release.

The deal is structured around Corning issuing Nvidia two types of warrants:

“Pre-funded” warrants for 3 million Corning shares (which account for the bulk of the $500 million to the fiber-optics company).
“Traditional” warrants that enable Nvidia to buy 15 million shares at $180, thereby benefiting from Corning’s share price trading above that level within three years’ time (unless this partnership is terminated or Corning makes a “fundamental transaction” before that). If and when Nvidia exercises those warrants in full, CEO Jensen Huang will be cutting a much heftier check to Corning.

So while on the surface this deal may not look as big as Nvidia’s recent $2 billion investments in Marvell Technology, Coherent, and Lumentum, once all the dust settles, it could turn out to be considerably more!

Luke Kawa

AMD’s spike reveals just how central CPUs are to the AI boom

“The world has changed, amid sentiment that the CPU growth trajectory has changed,” wrote Morgan Stanley analyst Joseph Moore.

AMD Ryzen 5 2600 Processor close up in the black motherboard CPU socket. Advanced Micro Devices is an American semiconductor company

Helena Cheng4h

AMC gains as strong Q1 results give breathing room for balance sheet improvements

AMC shares are rising in early Wednesday trading after the theater chain reported Q1 earnings results with revenue exceeding estimates after the bell Tuesday.

Key numbers:

Revenue of $1.05 billion (compared to analyst estimates of $972.6 million).
Adjusted EBITDA of $38.3 million (estimate: $7.7 million).

Attendance reached 30.7 million in the US and 16.9 million internationally, with improving demand thanks to recently released movies like “Project Hail Mary,” “The Super Mario Galaxy Movie,” and “Michael.”

A prolonged string of positive operating results like these will be needed to improve AMC’s balance sheet over time. AMC is still carrying around $4 billion in debt, which management is aiming to refinance and pay down over time.

“Refinancing has bought time to delever amid the stop-and-go box-office rebound as film supply is set to improve,” Bloomberg Intelligence analysts Kevin Near and Geetha Ranganathan wrote in the wake of this release. “AMC expects to close more underperforming theaters this year and hinted that positive free cash flow may hinge on a strong 2027 movie slate.”

Analysts at Benchmark upgraded the stock to “buy” from “hold” following these Q1 results.

Rani Molla

Uber Q1 earnings, Q2 guidance come in above Wall Street estimates

Uber reported earnings before the bell Wednesday.