The "Seven Sisters" of the US stock market once drove the market, but now they are heading towards differentiation
The "Seven Giants" of the US stock market are accelerating their divergence, with only Alphabet and NVIDIA expected to outperform the S&P 500 index by 2025, while the other five lag behind. The investment logic in AI has shifted from collective enthusiasm to selective positioning: Amazon, Microsoft, and others are heavily investing in cloud and AI infrastructure, while Apple and Tesla are falling behind due to cautious investments or slowing core businesses. This internal divergence reflects the market's transition from thematic speculation to a focus on profitability and niche sectors
The "Seven Giants" tech stocks that once drove the U.S. stock market to new highs are gradually becoming differentiated. As investors adopt a more cautious attitude towards the artificial intelligence spending boom, this portfolio of mega-cap stocks has shown significant performance disparities over the past year.
According to The Wall Street Journal, by 2025, only Alphabet and NVIDIA will outperform the S&P 500 index, while the other five giants—Microsoft, Meta, Apple, Amazon, and Tesla—will lag behind the market. Fund managers point out that this combination is no longer synonymous with market-leading forces. David Bahnsen, Chief Investment Officer of Bahnsen Group, stated:
“The correlation among them has broken down. The only thing they have in common now is the trillion-dollar market cap label.”
This shift marks a new phase in the AI trading logic since the start of this bull market, as investors begin to position themselves more selectively. Some funds anticipate that AI dividends will spread to industries such as healthcare, while others focus on chip manufacturers or energy companies, reflecting a market shift from the AI theme to segmented tracks and substantive profitability.
The AI Arms Race Intensifies Internal Differentiation
The AI spending boom is creating structural differentiation within the "Seven Giants." Amazon, Alphabet, Microsoft, and Meta have clearly transformed into "hyperscale cloud service providers," investing hundreds of billions of dollars in training new AI models, building data centers, and expanding cloud computing infrastructure. NVIDIA continues to dominate the high-end AI chip market, providing core computing power for the most advanced AI models.
Meanwhile, other members are relatively lagging. Apple's stock price underperformed the S&P 500 index last year, as the company, known for the iPhone, faced market criticism for its cautious investment in AI and slower progress compared to competitors. Tesla, once the market focus, has seen its stock performance significantly lag behind most of its "Seven Giants" peers as electric vehicle sales growth slows.
Michael Arone, Chief Investment Strategist at State Street Global Advisors, pointed out:
“They are at different stages of development. The past tide lifted all boats, and now we will see clear winners and losers.”
Retail Investors Shift Attention
Individual investors, who have long firmly held the "Seven Giants," are gradually shifting their attention to other sectors of the market. Vanda Research data shows that last year, retail trading in these seven stocks significantly decreased compared to levels in 2023 and 2024.
Taking Tesla, which has long been favored by retail investors, as an example, its retail trading activity has notably declined. In 2025, the average daily retail trading volume for this stock decreased by about 43% from its peak two years ago. Despite the differentiation, these seven companies still have a massive influence on the market. According to Dow Jones market data, they collectively account for about 36% of the total market capitalization of the S&P 500 index, and their movements will continue to affect the overall market performance
