by SIACharts.com
Over the past three years, the Magnificent Seven, Apple Inc., Microsoft Corporation, Alphabet Inc., Amazon.com Inc., Meta Platforms Inc., NVIDIA Corporation, and Tesla Inc., have driven an outsized share of U.S. equity returns. Their earnings growth, AI positioning, and capital-light scalability have propelled major indices higher, creating historically elevated concentration levels within cap-weighted benchmarks. For investment advisors, the issue is not whether these are high-quality companies, they clearly are, but whether client portfolios have become unintentionally dependent on a narrow leadership cohort.
More recently, relative strength data suggests that momentum within the group is beginning to narrow. Leadership is concentrating in fewer names, while others show signs of deceleration versus the broader market. From a portfolio construction standpoint, this shift is notable. Periods of extreme concentration often coincide with late-stage momentum cycles, where risk becomes asymmetric, continued upside may be incremental, while downside could be amplified if leadership breaks.
Over the past year, the Magnificent Seven, Apple, Microsoft, Alphabet, Amazon, Meta, NVIDIA, and Tesla, together reached a combined market value of almost $23 trillion at their recent 52-week highs. Today, their total value sits around $21 trillion, meaning they have collectively lost about $2 trillion, or nearly 8 to 9 percent of their peak value. In simple terms, that is like taking almost one out of every ten dollars these seven companies were worth and watching it vanish, a stark reminder of how even the biggest, most dominant stocks can fall, and why concentration in just a handful of leaders carries real risk for portfolios.
NVIDIA: The Apex Leader of the AI Cycle
Within the Magnificent Seven, NVIDIA Corporation has emerged as the performance outlier, especially over the past 3 years where it has returned 102.39% for investors. Technically speaking, Nvidia Corp. (NVDA) currently holds a SIA SMAX Score of 7/10 within the Electronics & Semiconductor sector, which ranks 1/31 and remains in the Favored green zone. Within the SIA S&P 100 Index Report, NVDA is positioned 33/100, reflecting an improvement of 3 spots on a monthly basis, though down 13 spots quarterly. The SIA Matrix Position Overlay Tool indicates the stock has recently transitioned into the yellow neutral zone of the S&P 100 Index Report and to further muddy the waters, the most recent Point and Figure signal is a bullish P&F triple top.
From a Point and Figure perspective, support levels cluster first at near-term $179.37 (3-box reversal level), followed by a secondary consolidation zone between $169.02 and $165.71, with a broader historical support range between $147 and $95. Overhead resistance might initialize at $210.16, representing the prior high, with a secondary vertical count objective at $256.18 shoudl the stock break to new highs. Performance versus the SIA S&P 100 Index shows monthly, quarterly, and yearly returns of 4.23%, 10.02%, and 54.55% respectively, compared to benchmark returns of -0.61%, -0.02%, and 17.00%.
NVIDIA vs. Global Diversification: A Comparison with ACWX
To contextualize this concentration dynamic, it is useful to compare NVIDIA to the iShares MSCI ACWI ex U.S. ETF (ACWX), which provides diversified exposure to developed and emerging markets outside the United States. While NVIDIA represents a single-company bet on AI infrastructure, ACWX reflects broad global earnings streams across financials, industrials, commodities, healthcare, and international technology leaders.
The performance divergence between a concentrated AI beneficiary and a diversified international index highlights a broader allocation question facing RIAs: Should portfolios continue leaning into U.S. mega-cap dominance, or is there a case for rebalancing toward underrepresented global markets? As relative strength narrows within the Magnificent Seven, comparing single-stock momentum to diversified international exposure becomes not just a performance discussion, but a risk management decision.
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