Magnificence beyond the Magnificent 7? Here's the next generation of AI winners powering the stock market.

By Isabel Wang

Top contributors to the S&P 500's rally this year are no longer the so-called Magnificent Seven group of tech stocks

A new wave of AI winners is propelling the stock market to fresh records.

Wall Street's tech darlings are losing their shine in 2025, as a new class of large-cap companies - particularly Broadcom, Oracle and Palantir - is rewriting the S&P 500 leaderboard and powering the next phase of the AI boom.

Some of the top contributors to the S&P 500's SPX rally so far this year are no longer the so-called Magnificent Seven group of tech names.

Broadcom Inc. (AVGO) has muscled its way to become the fourth-biggest contributor to the S&P 500 in terms of market capitalization this year, outpacing tech icons such as Meta Platforms Inc. (META), Tesla Inc. (TSLA) , Amazon.com Inc. (AMZN) and Apple Inc. (AAPL).

Just behind, Oracle Corp. (ORCL) and Palantir Technologies Inc. (PLTR) have also cracked the top 10 companies with the largest market-gap gains so far in 2025, according to Dow Jones Market Data (see table below).

   Top 10 S&P 500 company               Market cap as of Dec. 31, 2024  Market cap as of Sept. 30  Market cap gain YTD 
   Nvidia Corp.                                3,288,762                       4,533,894                1,245,132 
   Microsoft Corp.                             3,133,802                       3,850,009                  716,207 
   Alphabet Inc. Class A                       2,322,962                       2,942,495                  619,533 
   Broadcom Inc.                               1,086,717                       1,557,956                  471,239 
   Meta Platforms Inc Class A                  1,477,828                       1,844,735                  366,907 
   Oracle Corp.                                   466,085                         799,204                 333,119 
   Palantir Technologies Inc. Class A             172,214                         432,763                 260,549 
   JPMorgan Chase & Co.                           674,865                         867,355                 192,490 
   Tesla, Inc.                                 1,296,350                       1,478,761                  182,411 
   Source: FactSet. Values in millions 

To be sure, the Magnificent Seven - a group of megacap technology stocks including Apple, Microsoft Corp. (MSFT), Google parent Alphabet Inc. (GOOG) (GOOGL), Amazon, Nvidia Corp. (NVDA), Tesla and Meta - have still dominated the AI narrative this year, accounting for about 36.4% of the S&P 500's total market capitalization. But they're no longer driving the S&P 500's gains the way they did in 2023 and 2024.

Once capable of adding more than $5 trillion in market value a year, the Magnificent Seven has managed just $3.1 trillion in market-cap gains in the first three quarters of 2025, according to Dow Jones Market Data - still a massive presence in the market, though it suggests their once-unstoppable momentum may be fading.

"The Magnificent Seven are here to stay. However, we should recast it as the Magnificent Ten, but the importance of these large-scale leaders is going to continue," said Dan Hanson, senior portfolio manager and head of the quality equity team at Neuberger Berman.

"The benefits of scale that have allowed for such massive capital-spending commitments among the hyperscalers in particular to capitalize on the AI opportunity is a flywheel, a juggernaut that's going to ensure continued relevance for those sets of companies," Hanson said.

The slowdown in the growth of the Magnificent Seven reflects a growing divergence within the group this year. Nvidia, Alphabet, Microsoft and Meta are still riding the AI wave, with their shares up 40.8%, 28.6%, 22.5% and 24% year to date, respectively, while Amazon, Apple and Tesla have stumbled behind.

See: Tesla delivers a big sales beat, and the end of EV tax credits may not be the only reason

Shares of Apple have only risen 2.7% so far this year as the iPhone maker is taking its time with AI, while most other tech companies are racing to push out AI features as fast as they can.

See: Why Apple and other slow AI adopters may be right to wait and see

Amazon's stock is up just 1.3% this year amid the firm's lower-than-anticipated growth in its cloud business, Amazon Web Services. Investors have also worried that much faster growth at Microsoft and Alphabet's cloud businesses is a sign that Amazon is losing its edge in the world of AI.

Tesla's stock is up 10% this year amid declining EV sales, market-share loss in Europe and increasing pressure from its global competitors.

The next generation of AI innovators

One of the many reasons investors have started to turn their attention to the next generation of AI innovators is that they think the record-setting rally in some of the the Magnificent Seven stocks has left little room for further upside.

Oracle, a notable newcomer, has been making the most of the AI headlines recently after the company said that its cloud business could see revenue exceed half a trillion dollars in the next few months. The company also recently signed a massive $300 billion cloud-computing deal with OpenAI, which committed to purchase computing power from Oracle for roughly five years, starting in 2027. Oracle's stock was up 24.3% in September.

Similarly, shares of Broadcom Inc. surged 10.9% last month after its chief executive said he will stick around in that job until at least 2030 and help the company crush its targets for AI revenue. The company also posted a fourth-quarter outlook that beat expectations and added a new customer for its custom chips.

See: OpenAI joins an elite club with its new $500 billion valuation. Now the pressure is on.

Some investors are also questioning whether the broadening AI rally might spread to other parts of the market, but Hanson said that remains highly unlikely.

"I wrestle with whether to call that broadening, because it's very different from [the rally broadening to] the rest of S&P 493," he told MarketWatch in a phone interview. "I think the leadership and the industrial momentum around AI will continue to be dominated by these large-scale businesses at the top of the heap in terms of market cap," he said.

U.S. stocks finished higher on Thursday with all three major indexes booking a fresh round of record highs. The Dow Jones Industrial Average DJIA was up 0.2%, while the S&P 500 eked out a small gain of less than 0.1%, and the Nasdaq Composite COMP advanced 0.4%, according to FactSet.

-Isabel Wang

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

10-03-25 0730ET