The “Magnificent Seven” have dominated the U.S. market for years and sat on a combined valuation of $21.7 trillion as of Tuesday’s close. That number, however, masks how much they lost in June. The group — which Microsoft , Nvidia , Alphabet , Apple , Meta , Tesla and Amazon — shaved off roughly $2 trillion in market cap, as investors are starting to reassess the investing case for these once unbeatable mega-caps. The Roundhill Magnificent Seven (MAGS) , an exchange-traded fund tracking these seven tech giants on an equal-weighted basis, fell 9% in June, marking the second worst month for the fund since it’s 2023 launch. Only March 2025, when it fell 10.5%, was worse for the fund. One reason behind the underperformance: These companies once coveted for their hefty cash flows have turned into big spenders as they devote most of that cash for the artificial intelligence race. Apollo Global Management’s chief economist Torsten Slok noted that free cash flow for at least four of the firms making up the group — namely Meta, Alphabet, Microsoft and Amazon — fell sharply from its 2024 peak into 2026. With AI spending projected to exceed $700 billion this year , soaring capital expenditures on AI has raised concerns for investors used to sizable buybacks from these companies as a buffer to their investments. These companies are investing heavily in AI hardw …
