{"id":3798,"date":"2025-12-15T12:28:55","date_gmt":"2025-12-15T12:28:55","guid":{"rendered":"https:\/\/microvibenews.com\/?p=3798"},"modified":"2025-12-15T12:28:55","modified_gmt":"2025-12-15T12:28:55","slug":"magnificent-7-isnt-that-magnificent-5-stocks-have-underperformed-the-market-this-year","status":"publish","type":"post","link":"https:\/\/microvibenews.com\/?p=3798","title":{"rendered":"Magnificent 7 isn’t that magnificent: 5 stocks have underperformed the market this year"},"content":{"rendered":"

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S&P 500 futures were up 0.44%\u00a0 this morning after the index lost 1.07% on Friday, a day after setting a new all-time high on Dec.11.<\/p>\n

The index is still up 16% year-to-date\u2014an above-average performance for U.S. stocks. Analysts have long complained that the index is dominated by the \u201cMagnificent 7\u201d tech stocks. Between October 2022 and November 2025 roughly 75% of gains in the S&P 500 came from this handful of companies.<\/p>\n

But as we draw near to the close of the year, only two of those stocks\u2014Alphabet and Nvidia\u2014have beaten the market as a whole, year to date:<\/p>\n

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What appears to be happening is that investors are picking between winners and losers in tech, as opposed to just herding into the index or tech stocks as a whole. That\u2019s probably healthy if you are worried that AI spending is creating a bubble in tech stocks.<\/p>\n

The best example of this is Oracle, which is up a respectable 14% year to date but has declined 42% from its high in September. Investors have not liked the extra debt that Oracle has taken on, at increasingly wider interest spreads above the risk-free benchmarks, to fund its AI buildout.\u00a0<\/p>\n

Wall Street is not yet ready to declare the AI gold rush a bubble. \u201cIf this is a bubble, it is still in its early stages,\u201d Deutsche Bank analysts Adrian Cox and Stefan Abrudan said in a recent deep-dive research note on AI.<\/p>\n

Thus far, the capital expenditure and the revenue is real: it\u2019s hitting the top and bottom lines of Alphabet and Nvidia, and that\u2019s why valuations for those companies are so healthy. \u201cThe charge is led by well-established Big Tech companies with multiple revenue streams, who are paying for their investment in data centers mostly out of free cash flow and from which they are generating immediate returns from enterprise customers,\u201d Cox and Abrudan wrote.<\/p>\n

\u201cWe think that reports of a bubble are exaggerated (for now),\u201d they said.<\/p>\n

Elsewhere: Asian markets were down today but markets in Europe largely rose in early trading. The STOXX Europe 600 was up 0.63% at the time of writing; The U.K.\u2019s FTSE 100 was up 0.74%.<\/p>\n

Here\u2019s a snapshot of the markets ahead of the opening bell in New York this morning:<\/strong><\/p>\n