The chart of the week looks at the once famous Magnificent 7 (Mag 7) stocks since the start of 2021. While they have significantly outperformed the broader S&P 500 since 2021, they have fallen a little out of favor. Their strongest performance occurred in 2023 and 2024, when the Mag 7 generated annual returns of 76% and 48%, far exceeding the S&P 493 returns of 16% and 14%.
The earnings growth chart helps explain these performance differences, as the Mag 7 consistently delivered stronger earnings growth than the S&P 493. For example, Mag 7 earnings grew by 31% in 2023 and 40% in 2024, while the S&P 493 recorded earnings growth of -4% and 4% in those years. In contrast, both groups experienced losses in 2022, but the Magnificent 7 declined more sharply (-40%) than the broader market (-12%), which shows that stocks with higher valuations tend to underperform in poor markets.
Although earnings growth for the Mag 7 slowed to 22% in 2025, it remained well above the 10% for the rest of the market, helping sustain their leadership. We will see if earnings growth expectations for 2026 come to reality, with the Mag 7 doubling the other 493 names, which could be a sign of a second half revival for the ever famous, Magnificent 7.
Chart of the Week – June 29, 2026
The chart of the week looks at the once famous Magnificent 7 (Mag 7) stocks since the start of 2021. While they have significantly outperformed the broader S&P 500 since 2021, they have fallen a little out of favor. Their strongest performance occurred in 2023 and 2024, when the Mag 7 generated annual returns of 76% and 48%, far exceeding the S&P 493 returns of 16% and 14%.
The earnings growth chart helps explain these performance differences, as the Mag 7 consistently delivered stronger earnings growth than the S&P 493. For example, Mag 7 earnings grew by 31% in 2023 and 40% in 2024, while the S&P 493 recorded earnings growth of -4% and 4% in those years. In contrast, both groups experienced losses in 2022, but the Magnificent 7 declined more sharply (-40%) than the broader market (-12%), which shows that stocks with higher valuations tend to underperform in poor markets.
Although earnings growth for the Mag 7 slowed to 22% in 2025, it remained well above the 10% for the rest of the market, helping sustain their leadership. We will see if earnings growth expectations for 2026 come to reality, with the Mag 7 doubling the other 493 names, which could be a sign of a second half revival for the ever famous, Magnificent 7.
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