As the Magnificent 7 lose swagger, which stock should you buy now? Experts reveal the right strategy

For years, the Magnificent Seven tech giants commanded investors’ attention, dominating the S&P 500 Index and shaping market movements. Those days are over.

While the technology-heavy Nasdaq 100 Index is up 16% in 2026 and the S&P 500 has climbed 10%, an index of the Mag 7 has gained just 1.7%.

The AI rally has new leaders

The artificial intelligence investment theme that propelled tech behemoths—Nvidia, Alphabet, Apple, Microsoft, Amazon, Meta and Tesla—to market leadership is far from over, but investor preferences are shifting. For example, chipmakers such as Micron Technology and Sandisk have emerged as top performers, while the Magnificent Seven are hardly getting investors’ attention.

To get a sense of how quickly this has turned, consider that in April the Mag 7’s 40-day correlation to the Nasdaq 100 peaked at above 0.95, a near-perfect correlation. It recently dropped below 0.7, its lowest since 2017. Big tech and the S&P 500 “are moving together about as little as they were in 2015, when these names were only 10-11 pct of the index,” Jessica Rabe, a co-founder at DataTrek Research, wrote in a note to clients on June 30.

Alphabet did well, Microsoft, Meta didn’t – gap is huge

Within the group, however, the gap between winners and losers is huge — Alphabet has done well, while Microsoft and Meta have struggled even though their businesses remain strong, asserted Viram Shah, Founder and CEO, Vested Finance

“So, which Mag 7 stock is best? It is now really 7 separate questions.”

Here’s a look at how to invest in Mag 7 stock now

Instead of picking a favourite, check three simple things for each company:

• One: Is the company actually making money from AI today, or is it still spending heavily and hoping the profits come later?
• Two: How expensive is the stock relative to its growth rate? Some of these seven are priced much higher than others.
• Three: How much of these stocks do you already own? They make up roughly a third of the S&P 500. So if you hold an index fund, you already own a lot of them without realising it.

Index funds first, then add individual stocks

For Indian investors, the sensible order is: index funds first, individual stocks second. Build your core US exposure through a diversified fund, Shah adds

“Then, if you strongly believe in one of these companies, buy a small amount on top — small enough that you can sit through a 20-30% fall without panicking, because every one of these stocks has fallen that much at some point in the past year.”

Meta is currently the best Magnificent 7 stock to buy

So, after building your core portfolio with an index fund, if you are wondering which AI stock deserves a small place in it, Santosh Meena, Head of Research at swastika investmart, says, ‘It’s Meta.’

“It offers the strongest risk/reward, with a relatively attractive forward P/E (17-22x), robust ad revenue growth, rising user engagement via Threads, and clear AI monetisation upside—all while generating strong free cash flow for buybacks and dividends.”

Nvidia remains the top choice for investors looking for pure AI growth, although its stock is expensive and faces rising competition. Microsoft offers stability, while Alphabet stands out for its attractive valuation. Apple and Amazon are growing more slowly, and Tesla continues to face valuation and execution challenges.

“META balances valuation, momentum, and execution best right now, though diversification is always wise given tech volatility,” Meena asserts.