Why Apple, Tesla, and Google Are Slowing Down the S&P 500 Rally
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Interestingly, other big tech stocks in the 'Magnificent Seven' have performed much better in 2025. Microsoft (MSFT), Nvidia (NVDA), and Meta Platforms (META) have each risen by at least 14% due to strong progress in using AI to grow their businesses. Companies like Nvidia have benefited from demand for AI computing hardware, while Meta has used AI to increase ad revenue. Even smaller tech firms like Netflix (NFLX), Broadcom (AVGO), and Palantir (PLTR) have helped lift the market. Overall, the index is near record highs. However, since the Magnificent Seven account for about one-third of the S&P 500, the performance of just a few companies can significantly affect the entire market.
While it's encouraging to see a broader range of companies pushing the market higher, experts say that may not be enough to make up for the weakness in Apple, Alphabet, and Tesla. Paul Stanley from Granite Bay Wealth Management notes that the rest of the market would need to be extremely strong to balance out the drag from these giants. Apple's stock has recently ticked up a bit after reports that it might use AI from Anthropic or OpenAI to upgrade Siri, but investors are still waiting for a clearer plan. Without a rebound from these lagging stocks, the S&P 500 could struggle to keep its momentum in the second half of the year.
Which Magnificent Seven Stock Is the Better Buy?
Turning to Wall Street, out of the Magnificent Seven stocks, analysts think that GOOGL stock has the most room to run. In fact, GOOGL's average price target of $199.77 per share implies more than 12% upside potential. On the other hand, analysts expect the least from TSLA stock, as its average price target of $287.39 equates to a loss of 8.8%.
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