Markets 
Shares in the Magnificent 7 tech stocks have slumped this week amid investors’ concerns about massive spending by hyperscalers on artificial intelligence infrastructure amid uncertainty about the global economy due to the resumption of hostilities in the Iran war.
The so-called Magnificent Seven tech stocks experienced their biggest one-day drop in over a year on Thursday, with Bloomberg reporting that an index of the group fell 4.8% and erased about $787 billion in market value – the steepest single day decline since April 2025.
The report noted that as of Thursday’s close, the Mag Seven index was down about 11% from the record high it reached in late May, with about $2 trillion in market cap wiped out.
As of Friday morning, six of the Mag Seven stocks were down over the last five days of trading, with Tesla down over 19%, while shares in Google parent Alphabet (-8.5%), Amazon (-6.3%), Meta (-6%), Microsoft (-1.3%) and Apple (-0.4%) were also down. By contrast, Nvidia shares are up about 1.9% in the last five days.
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Tech stocks’ slide steepened after Alphabet and Tesla released their earnings report after Wednesday’s trading session, with both companies reporting large capital expenditures this year.
Alphabet announced plans to spend about $200 billion on capex this year, up from a prior estimate of $190 billion, with the higher spending on AI data centers and infrastructure contributing to the company’s quarterly cash flow turning for the first time since Google went public, per Bloomberg’s report.
“Alphabet’s higher investment outlook helps reinforce our view that the AI infrastructure buildout remains a durable theme,” said Edward Jones senior analyst Brian Therien. “However, the negative share-price reaction may indicate that investors are becoming more focused on returns generated on AI-related investments.”
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Tesla’s profits came in well below the estimates of Wall Street analysts amid a ramp up in spending, with CEO Elon Musk saying on the company’s earnings call that 2026 will be a “massive capex year” and that the company “should be spending on capex as fast as we can – spend as fast as we can without it being too wasteful.”
The company’s spending aims to enhance its AI capabilities as well as boosting production of Optimus humanoid robots, as well as robotaxis and autonomous vehicles.
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| Ticker | Security | Last | Change | Change % |
|---|---|---|---|---|
| NVDA | NVIDIA CORP. | 208.76 | -3.30 | -1.56% |
| AAPL | APPLE INC. | 321.66 | -4.23 | -1.30% |
| MSFT | MICROSOFT CORP. | 381.58 | -8.76 | -2.24% |
| GOOGL | ALPHABET INC. | 317.69 | -24.40 | -7.13% |
| AMZN | AMAZON.COM INC. | 233.66 | -11.19 | -4.57% |
| META | META PLATFORMS INC. | 606.10 | -21.07 | -3.36% |
| TSLA | TESLA INC. | 319.69 | -54.32 | -14.52% |
Ryan Lee, senior vice president of product and strategy at Direxion, said in a note that, “While Tesla continues to invest heavily in AI and robotics, monetization remains the central concern following the earnings miss.”
“Tesla has become the physical AI story, with the potential to bring artificial intelligence into consumers’ everyday lives through autonomous vehicles and robotics. The question is how quickly those investments can begin supporting the valuation,” Lee added.
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