In This Article:
The "Magnificent Seven" group (MAGS), made up of Nvidia (NVDA), Alphabet (GOOG, GOOGL), Tesla (TSLA), Microsoft (MSFT), Amazon (AMZN), Meta (META), and Apple (AAPL), has lagged so far in 2025.
NewEdge Wealth chief investment officer Cameron Dawson tells Morning Brief co-hosts Seana Smith and Brad Smith this lag is due in part to investors' waning patience with Big Tech's massive spending on artificial intelligence (AI) without seeing a payoff from the investments.
Dawson says the new DeepSeek model has sparked questions about Big Tech's spending. There's "a question about the efficacy of CapEx growth within the US tech complex. One of the things is that we've seen huge CapEx spending by the Mag Seven, which, of course, has benefited other Mag Seven names. Are we starting to get to the point where investors are losing patience with this degree of CapEx spending?"
The Mag Seven "has lagged as we've gone into 2025, and we think it's because investors are starting to ask the question: What is the return on invested capital for all of this spending that they're doing? We're seeing a lot more competition within AI, which is very much in contrast with these near-monopoly businesses that [are] the core bread and butter of the Mag Seven."
Related Videos
To watch more expert insights and analysis on the latest market action, check out more Morning Brief here.
This post was written by Naomi Buchanan.