Mag 7 Decoupling from AI Trade

The Magnificent Seven tech stocks (Nvidia, Alphabet, Apple, Microsoft, Amazon, Meta, Tesla) have decoupled from the broader market as the AI trade shifts focus to memory chipmakers like Micron and Western Digital — Sandisk. The Mag 7 index gained only 1.1% in 2026 versus the Nasdaq-100's 18% and S&P 500's 10% rise. The Philadelphia Semiconductor Index surged 82%. Investors pulled $786 million from the Roundhill Magnificent Seven ETF in June while pouring $9.3 billion into the Roundhill Memory ETF. Skepticism about heavy AI spending by cloud companies has driven the rotation, with Microsoft down 20% and its June worst since 2000. Earnings estimates for chipmakers have been revised up to 48.5% from 34.3%, while Mag 7 estimates fell to 18.9% from 21.4%. Analysts are divided on whether the rotation is sustainable.