Here’s another reminder about the giants’ share in the success of the S&P 500 
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Timo Heikkilä has closely reviewed the performance of tech giants, also from an AI perspective.
Of the MAG7 stocks, all but Nvidia have released their results. The markets liked the results of Apple and Meta Platforms. In contrast, Amazon, Alphabet, Microsoft, and Tesla were disappointments, and their share prices fell after the results. Especially the guidance was a disappointment to investors.
We have warned about the impact of a strengthening dollar on the results of mega-tech companies, and now it is starting to materialize. For example, Amazon reported it would impact Q1 revenue guidance by over $2 billion.
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Here’s a brief look at Alphabet, Amazon, Meta, and Microsoft
https://x.com/StockMarketNerd/status/1887899831105970638
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This tweet highlights comments from Amazon, Alphabet, and Microsoft leadership on cloud business, along with some graphs on the same theme.
https://x.com/TheTranscript_/status/1888014909784604933
EDIT:
If there were an exam on these, I’d get a passing grade. 
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Of course, it’s a bit of a one-sided comparison, and I didn’t really put it there just because of Tesla, but because there are several larger companies there.
https://x.com/Mayhem4Markets/status/1887671018602352642
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Well, these haven’t updated much, but a little in about three months.
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SalkunRakentaja’s article on how, according to Bank of America investment strategist Michael Hartnett, the dominance of the Magnificent Seven is coming to an end. 
The entry of Chinese AI startup DeepSeek into the market has caused turmoil in the stock market. The company has developed AI models comparable to OpenAI’s models, but apparently at a fraction of the cost and energy consumption. This has led to a significant sell-off in technology sector stocks.
https://www.salkunrakentaja.fi/2025/02/analyytikko-mahtiseitsikko-ylivoima/
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Charlie’s tweet about the revenue of giants, including the gross domestic product of different countries.
https://x.com/charliebilello/status/1890229726926762293
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The Magnificent Seven is being compared this time in terms of free cash flow
https://x.com/StockMKTNewz/status/1891129431734841427
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It’s really starting to get absurd; money is being quite effectively siphoned globally to the US (or at least to US companies’ offshore accounts)… When you consider that soon all the world’s companies’ software, data, and AI processes will run on US big tech platforms, then there’s a strategically pretty good basis to start raising prices and skim the cream off the margins.
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Here’s an article from SalkunRakentaja about how people are looking “more broadly” at other investment targets.
The long-awaited rotation in the stock market finally seems to be underway, as investors shift capital away from over-concentrated and highly popular ‘Magnificent Seven’ technology stocks towards a broader range of investment opportunities, according to financial house deVere Group.
Rotation refers to the movement of investment assets from one sector, asset class, or investment style to another. It typically occurs when market conditions change and investors seek to optimize their returns or reduce risks.
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If I understood correctly, the Magnificent Seven appears attractively valued based on 2025 earnings forecasts, compared to its long-term development.
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Those might have significance in trading, but I rather encourage investors to look at these Yardeni charts. Magnificent-7 - Yardeni Research There are a breathtaking 28 of these. But in my opinion, the most essential ones are below.
P/S 7.5 leaves no room for error for the slowdown in revenue (S) or earnings (E) growth.
Revenue (S) growth % and earnings (E) growth % are predicted to wane. The green curve peaked during the COVID-19 pandemic with the growth of remote work and again in the AI hype. It is quite typical for analysts to predict better outcomes 3-5 years out than for the coming year. Is it really true that Europe cannot find a competitor for these cloud services that would break the pricing power of the current US cartel?
Then a slightly different picture on the same topic that @Sijoittaja-alokas linked from X. MAG7 certainly doesn’t look attractive at these forward P/E levels.
Then, to lighten the mood at the end Which one doesn’t belong?
We’ll see when Tesla is dropped. It belongs to the MAGA camp.
Edit: I’ll continue. Big tech (MAG7 ex Nvidia+Tesla) is investing heavily. P/E doesn’t tell the truth. From @Heikki_Keskivali’s article Hidden Risk in Technology Companies - Heikki Keskiväli I quote the images:
How it turned out. Less money is coming to investors than operating profit. 10 years ago it was different.
I have written before that the shakeout is imminent. Big tech is investing in Nvidia’s overpriced (EBIT 62%) products. CAPEX/OCF cannot continue at this level for very long. I doubt it will last even another year.
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It would be fair for @Heikki_Keskivali to state that the message and idea of the text are completely identical to John Huber’s blog post from 5/2024.
”Capex is not only growing larger, but the rate of growth is set to accelerate this year as they invest in the AI boom. Combined capex at MSFT, GOOG and META is set to grow around 70% in 2024. As a percentage of sales, capex will grow from 13% of sales in 2023 to around 20% in 2024.
While most investors are aware of the growing capex requirements, I think many might be under appreciating how capital intensive these companies are becoming. Part of the reason for this is because these massive investments don’t immediately hit the income statement. They instead get expensed as depreciation over the useful life of the asset (e.g. the cost of a computer server in a data center gets expensed over 5-6 years).”
Probably just a complete coincidence:
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Here is a tweet about the forward-looking P/E ratio of mega-cap companies.
https://x.com/KoyfinCharts/status/1899520966235140108
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Here’s a fun comparison of how giant companies generate revenue and profit per employee.
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Here’s a cash comparison of giant corporations
https://x.com/carbonfinancex/status/1898768594550337683
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I have to say that Berkshire Hathaway is missing from the top spot on this graph 
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Of course, these tech companies also have debt, e.g.
MSFT
Total Cash (mrq) 71.55B
Total Debt (mrq) 102.91B
Total Debt/Equity (mrq) 34.00%
AMZN
Total Cash (mrq) 101.2B
Total Debt (mrq) 155.4B
Total Debt/Equity (mrq) 54.34%
Who knows what that cash position tells. Can’t find investment targets right now?
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Here’s a tweet about the revenues of giant companies.
https://x.com/VisualCap/status/1905243705402929510
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