The Magnificent Seven stocks experienced their largest one-day drop since April 2025's tariff-driven selloff, losing approximately $767 billion in market value halfway through Thursday's session. This significant decline was primarily fueled by new investor anxieties regarding the substantial capital expenditure required for artificial intelligence, further exacerbated by recent earnings reports from Alphabet and Tesla.
Tesla's stock plummeted around 13% after its profits failed to meet market expectations, while Alphabet saw a more than 7% drop following its announcement that 2026 capital spending could reach as high as $205 billion. These individual stock performances contributed heavily to the overall index's downturn.
As a result of this selloff, the Magnificent Seven Index is now down about 11% from its May record, having shed approximately $2 trillion in total value. Despite the broad decline, Apple has been a relative standout, as its strategy of largely avoiding heavy spending on AI infrastructure has been rewarded by investors. Nvidia, another Magnificent Seven member, is still up on the year, although its growth has recently slowed as investor attention has partially shifted towards memory-chip companies.
