It reverse in the short term
Not long ago, the CEOs of the Magnificent Seven rushed to donate one million dollars each and gathered in Washington to attend the inauguration ceremony of Trump’s second term as president. Many large technology stocks also hit new highs during the post-election rebound after Trump’s victory in November 2024.
The U.S. economy is already facing many uncertainties, concerns about economic recession linger, the rising prices caused by inflation have not yet eased, making Americans miserable, and concerns about the impact of tariffs have triggered a market sell-off.
2025 is destined to be a painful year for the Magnificent Seven, and it seems that it has just begun. The share prices of the Magnificent Seven led the market decline, which is rare in history.
Share price dropped more than the market
The S&P 500 index, which achieved a rare achievement of exceeding the bull market’s 20% increase for two consecutive years for only the second time in history, S&P 500 index fell from its all-time highs into a bear market in just 40 days. Benefiting from the sharp rebound in the U.S. stock market bear market since 2022 and the positive effects of artificial intelligence, the share prices of the Magnificent Seven have been sharp in the past two years, with the increase far exceeding the market and most industries.
In this period, due to multiple factors, they also took the lead in entering a bear market with a decline higher than the market. Some stocks even fell by more than half of their market value, or 40% close to the collapse standard. The rapid decline in technology stocks is only comparable to the period of the dot-com bubble.
AI capital spending raises questions
Compared with the past two years, investors have urged companies to increase their investment in artificial intelligence to occupy a strategic high ground and avoid losing market opportunities. Starting from the second half of 2024, investors’ attitudes reversed. The tens of billions of dollars of capital investment by Microsoft, Alphabet, and Amazon each year in capital expenditures obviously eroded profits, and the failure to see the results of AI monetization on revenue caused dissatisfaction among investors.
Deepin launched a low-cost but high-quality large model with a team of less than 200 people, causing a comprehensive shock to the global AI industry. Everyone began to question the necessity of investing large amounts of money to purchase AI chips. Nvidia was the industry most affected, and it also affected the rationality of the AI capital expenditures of the other six large technology giants.
Microsoft is one of them. The slowdown in the growth of its cloud business has accelerated investors’ doubts about its legitimacy, forcing Microsoft to successively cancel capital expenditures for several large-scale AI data centers that had been originally planned. This is also the main reason why Microsoft’s stock price will only rise by 15% in 2024. It is not only the worst performance among the Magnificent Seven, but also far behind the 23.31% of the S&P 500 and the 30.78% of the Nasdaq.
Microsoft’s stock price has fallen for eight consecutive weeks, the longest losing streak since February 2008. This reflects that investors are impatient with its capital expenditure eroding profits, and the slowdown in Azure’s revenue growth is also lower than expected, further exacerbating the irrationality of the high stock price.
Apple has lost its long-standing function as a safe haven for conservative investors during market corrections, and has lost nearly $700 billion in market value since setting a record closing price in December last year. Its stock price has fallen 17% during this period. The integration of Siri’s AI functions has been significantly delayed, forcing Cook to replace the top leader of the Siri team. Apple has also attracted a class action lawsuit from shareholders, questioning the company’s misleading investors and announcing an incorrect AI development schedule.
Reciprocal tariffs
The reciprocal tariffs launched by the United States have triggered comprehensive uncertainty in global financial markets and trade, forcing the Magnificent Seven to not only face the biggest tariff, regulatory, and stock price shocks caused by the United States itself since the outbreak of the epidemic, but also face boycotts, supervision, and investigations from reciprocal tariffs launched by countries around the world. The French have begun a boycott of American products: from Coke to McDonald’s.
In addition to China’s several tough counterattacks against the reciprocal tariffs launched by the United States, only the European Union has the ability to retaliate. The EU targeted 927.3 billion yuan worth of U.S. goods for the first wave of tariffs, and made it clear that if the negotiations failed to achieve reasonable goals, additional tariffs would be imposed on U.S. technology companies represented by Meta and Alphabet.
Geopolitics
Since Trump’s first term, the US government has formulated a series of semiconductor embargo policies against China, and Nvidia has been forced to launch downgraded versions of special product lines for the huge Chinese market, which accounts for a quarter of its revenue, in order to comply with US regulatory requirements. However, due to the huge size of the Chinese market, 1/4 is only a nominal proportion.
Most people admit that Nvidia’s revenue from sales to China also needs to add the 15% from Singapore and the proportions of countries such as Malaysia and the Middle East. Therefore, China’s actual revenue share of Nvidia should be between 40 and 50%.
The fourth quarter revenue release for 2024 failed to deliver a quarterly revenue growth of more than three-digit percentage for the first time. The impact of deep exploration, the backlash of major customers’ self-developed chips, the division of ASIC manufacturers, the competition from start-ups, and the most fatal tariffs and embargoes reduced China’s revenue by half. Even after the annual GPU Technology Conference, which used to significantly boost the stock price, its stock price continued to fall sharply.
As the United States tightens its regulation on China, Nvidia’s business and prospects in China are becoming increasingly bleak. In addition, American technology companies are increasingly worried that the US embargo will not only accelerate the loss of this rare second largest market for American companies, but will also accelerate the rise of their competitors and seize the original market share of American companies. And this concern has already occurred; for example, Huawei’s AI chips, Alibaba and Deepin’s AI models, and BYD’s electric vehicles are the three most famous cases.
Microsoft was questioned by US lawmakers about national security risks. Microsoft has clearly accelerated its departure from China in 2024, requiring 800 cloud and AI employees in mainland China to transfer to work abroad, closing all offline authorized stores in the Chinese market, and not allowing Chinese people to use its related AI core technologies, among other decoupling measures. In February 2025, Alphabet was investigated by antitrust authorities in China. In March 2025, Microsoft was forced to close its joint venture with MicroPort Software, its main outsourcing subsidiary in China, and laid off 2,000 employees.
Antitrust
As far as I can remember, except for Tesla, the other Magnificent Seven have been repeatedly included in various antitrust investigations in major countries around the world, and many cases have been ruled valid. Even if it is not established, they are forced to modify their business models to comply with the provisions of the law. In most cases, since the Magnificent Seven are American companies, the United States will intervene, and most of the time the matter will end in nothing. They dare not offend the United States. The only two countries that dare to impose heavy penalties on American companies in an actual way, without making much noise but little results, are the European Union and China.
In August 2024, Alphabet failed in its appeal; the U.S. Department of Justice established the antitrust case against Alphabet. In March 2025, the U.S. Department of Justice’s latest proposal still required Google to divest the Chrome browser, causing Alphabet’s stock price to be underestimated since the antitrust case. In September 2024, the court ruled that Alphabet’s appeal against the European Commission’s ruling that Google abused its monopoly power to suppress competitors’ shopping services failed and was fined 2.4 billion euros.
In March 2024, the EU Digital Markets Directive (DMA) came into effect, and Alphabet, Apple, Meta, Microsoft, and Amazon were all included in the gatekeepers and included in the key regulatory list. Violations of the DSA are costly: platforms that fail to implement the new rules as required face fines of 6% of global turnover and could ultimately result in a suspension from doing business in the EU.
In February 2025, Google violated the anti-monopoly law and was investigated by the State Administration for Market Regulation for its monopoly on the Android system and Chinese companies’ overseas advertising.
Both the US Federal Trade Commission and the European Union have launched antitrust investigations into Microsoft, focusing on software bundling. The reasons are the same as those used to establish the antitrust case against Microsoft more than 20 years ago, except that the products sold in bundles are different.
In recent years, Apple has been repeatedly asked by governments in major countries around the world to open up payment methods for its mobile stores and reduce commission rates. The European Union has also been relentless in its demands, constantly demanding that Apple open up the interface of its unique and special closed ecosystem to third-party manufacturers. Typical cases include Apple’s surrender in abandoning Lightning and switching to USB, as well as the ongoing NFC interface.
Political
Tesla’s stock price rose by more than 200% from its low in April to mid-December in the fourth quarter of 2024, as investors became extremely optimistic about the candidate Musk bet on being elected as the US president.
The anti-Musk and anti-Tesla protests that broke out across Europe and the United States, coupled with the wave of layoffs in American civil servants caused by the Department of Government Efficiency (DOGE) led by Musk, and the intervention of right-wing political parties and representative figures in elections in European countries through donations, have triggered a backlash in many European countries and are reflected in the boycott of Tesla’s sales in Europe. In some countries, quarterly sales have even fallen by more than 40%.
Musk’s past empty promises and habitual missed deliveries, as well as his vision for AI, autonomous driving, and humanoid robots, have gradually been questioned by investors.
What is reported in the media are all negative news about Musk and Tesla, including the sky-high salary case, the fact that autonomous driving has wide-ranging functions after being tested by influencers in the two major markets of the United States and China, various types of vehicles have been recalled repeatedly, important and key senior executives resign every once in a while, protests from labor unions, and poor working environment.
In addition, Tesla has been proud of its position as the global leader in six major areas: electric vehicle technology, factory automation, fast charging capabilities, revenue, profit, and sales in the past few years, but these areas have all been surpassed by its Chinese counterparts.
This explains why Tesla has suffered the most severe stock price losses among the Magnificent Seven. The high stock price has no rational support at all. It is not unfair that its market value has fallen by half since it set a closing record in December 2024. Even Chief Executive Elon Musk’s close relationship with Trump has failed to protect the company’s stock price.
Key data of Magnificent Seven
Below is a comparison table of key data for the Magnificent Seven, with figures collected up to April 15, 2025.
| ticker | 2024 revenue (in USD billion) | Revenue growth rate | Operating income | Operating income growth rate | Gross margin | Operating margin | Net margin | P/E | Percentage of dropping from all-time high |
| AAPL | 395.76 | 2.61% | 125.675 | 5.91% | 46.52% | 34.46% | 24.30% | 30.23 | 22.28% |
| AMZN | 637.96 | 10.99% | 68.593 | 86.13% | 48.85% | 11.29% | 9.29% | 32.77 | 25.96% |
| GOOGL | 350.02 | 13.87% | 112.39 | 33.33% | 58.20% | 33.97% | 28.60% | 19.01 | 24.51% |
| META | 164.5 | 21.94% | 69.38 | 48.40% | 81.68% | 45.28% | 37.91% | 22.9 | 29.61% |
| MSFT | 245.1 | 15.67% | 109.433 | 23.62% | 69.41% | 45.46% | 35.43% | 30.78 | 17.64% |
| NVDA | 130.5 | 114.20% | 81.453 | 147.04% | 74.99% | 61.11% | 55.85% | 36.59 | 26.73% |
| TSLA | 97.69 | 0.95% | 7.076 | -20.41% | 17.86% | 6.16% | 7.26% | 123.71 | 47.99% |
I am the author of the original text, the essence of this story was originally featured on Smart Magazine, Issue of May 2025
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