The era of buying blindly with closed eyes is over! The strategy of the seven giants in US stocks of holding together has failed. Wall Street calls for buying separately in 2026.

In recent years, many investors have followed a simple strategy to outperform the market: heavily investing in large US tech stocks. This strategy has brought substantial returns for investors for a long time, but it faltered in 2025. Since the Federal Reserve began raising interest rates in 2022, most of the companies in the "Big Seven Tech" have underperformed the S&P 500 index for the first time. Although an index measuring the performance of the "Big Seven" rose by 25% in 2025, higher than the 16% rise in the S&P 500 index, this increase was entirely driven by the strong performance of Alphabet Inc. Class C and NVIDIA Corporation. Many Wall Street professionals expect that this trend of differentiation will continue in 2026, as the profit growth of tech giants slows down and the market becomes more skeptical of the returns on massive investments in artificial intelligence (AI). Judging from the performance at the beginning of the year, their assessment is being confirmed the index of the Big Seven only rose by 0.5%, while the S&P 500 index saw a gain of 1.8%. In this context, it becomes crucial to carefully select individual stocks within this group. "The current market is no longer a one-size-fits-all situation," said Jack Janasiewicz, Chief Portfolio Strategist at Natixis Investment Managers Solutions, managing $1.4 trillion in assets. "If you just blindly buy the entire group of tech giants, the losses in individual stocks are likely to offset the gains in other stocks." This three-year bull market has been led by tech giants, and since the bull market began in October 2022, only four companies NVIDIA Corporation, Alphabet Inc. Class C, Microsoft Corporation, and Apple Inc. have contributed more than a third of the increase in the S&P 500 index. However, as market funds begin to flow into other components of the S&P 500 index, investor enthusiasm for tech giants is waning. With the profit growth of large tech companies slowing down, investors are no longer satisfied with the empty promises of getting rich through AI and are expecting real returns. Assembling data shows that the profit growth of the Big Seven in 2026 is expected to be around 18%, the slowest since 2022, compared to the expected 13% profit growth of the other 493 components of the S&P 500 index. "We have seen the range of earnings growth among companies expand, and this trend will continue," pointed out David Lefkowitz, the head of UBS Group AG's global wealth management US stocks. "The tech industry is no longer the only star in the market." The market is still somewhat optimistic about the tech giants, as their valuations have relatively decreased. Currently, the expected P/E ratio of the Big Seven index is 29, much lower than the high of over 40 at the beginning of the year. In comparison, the expected P/E ratio of the S&P 500 index is 22, and that of the Nasdaq 100 index is 25. Here's an outlook for the Big Seven in 2026: NVIDIA Corporation As the dominant player in AI chip manufacturing, NVIDIA Corporation faces pressure from increased competition and concerns about the sustainability of spending by its largest customers. The stock has risen by 1165% since the end of 2022, but has dropped 11% since reaching a historic high on October 29 last year. Competitors like AMD have secured data center chip orders from OpenAI and Oracle Corporation, while major clients of NVIDIA Corporation such as Alphabet Inc. Class C are accelerating the deployment of custom chips. Despite this, due to the shortage of chips in the market, NVIDIA Corporation's revenue is still growing rapidly. Wall Street remains optimistic about NVIDIA Corporation, with 76 out of 82 analysts covering the stock giving it a "buy" rating. Analysts' average target price indicates a potential 39% increase in the next 12 months, the highest among the Big Seven. Microsoft Corporation 2025 was the second consecutive year that Microsoft Corporation underperformed the S&P 500 index. As a major spender in the AI sector, Microsoft Corporation is expected to approach $100 billion in capital spending in the fiscal year ending in June 2026. Analysts expect this figure to further increase to $116 billion in the next fiscal year. The expansion of data centers is driving the rebound in Microsoft Corporation's cloud computing business revenue, but the company's efforts to persuade customers to pay for software with integrated AI features have not been significantly successful. Brian Mulberry, portfolio manager at Zacks Investment Management, says investors are hoping that these substantial investments will tangible returns. "We see that some investors are looking for companies with better cash flow management capabilities, while also hoping to see clearer prospects for the profitability of AI businesses," Mulberry added. Apple Inc. Among the Big Seven, Apple Inc. has been the most conservative in its AI strategy. This strategy put pressure on the company's stock in the first half of 2025, with a cumulative drop of nearly 20% by early August. However, Apple Inc. later turned into a "anti-AI concept stock," favored by investors for not having to bear the risk of high AI investments. The stock surged 34% by the end of 2025. Meanwhile, strong iPhone sales have reassured investors demand for Apple Inc.'s core products remains strong. For Apple Inc., the key to stock price growth in 2026 lies in accelerating performance growth. Although the stock narrowly avoided setting a record for the longest consecutive decline since 1991 in a closing last Friday, recent gains have slowed significantly. However, the market expects Apple Inc. to achieve a revenue growth rate of 9% in the fiscal year ending in September 2026, the fastest since 2021. Currently, Apple Inc.'s expected P/E ratio is 31, second only to Tesla, Inc., among the Big Seven. To sustain this momentum, the company must deliver strong performance. Alphabet Inc. Class C Just a year ago, the market still believed that OpenAI was leading in the AI competition, causing concerns that Alphabet Inc. Class C would fall behind. Now, Alphabet Inc. Class C has become a recognized "favorite," leading in various areas of AI. The latest Gemini AI model from Alphabet Inc. Class C has received high praise, alleviating market concerns about losing to OpenAI. At the same time, the company's in-house TPU is seen as a critical driver for future revenue growth, even potentially eating into NVIDIA Corporation's dominant market share in the AI semiconductor market. In 2025, Alphabet Inc. Class C's stock price rose by over 65%, the best performance among the Big Seven. But can this upward trend last? Currently, the company's market value is approaching $4 trillion, with an expected P/E ratio of around 28, much higher than the five-year average of 20. Analysts' average target price indicates a predicted increase of only 3.9% for the stock in 2026. Amazon.com, Inc. As an e-commerce and cloud computing giant, Amazon.com, Inc. was the worst-performing company among the Big Seven in 2025, marking its seventh consecutive year at the bottom. However, as the year began in 2026, Amazon.com, Inc.'s stock price rebounded strongly, leading the group of giants. Market optimism towards Amazon.com, Inc. is mainly due to its AWS cloud computing business, which saw its fastest growth in many years in the company's latest financial report. Previously, the market had concerns about AWS lagging behind competitors, combined with the company's massive investments in AI (including utilizing Siasun Robot & Automation technology to improve warehouse operations). Investors expect that Amazon.com, Inc.'s efficiency improvement measures will soon show results, possibly making 2026 the year when the company's stock price goes from the bottom to the top. "Warehouse automation and more efficient logistics distribution will be huge growth drivers for Amazon.com, Inc.," said Clayton Allison, portfolio manager at Prime Capital Financial, who holds Amazon.com, Inc. stock. "The market has not fully tapped into this value yet, but it reminds me of Alphabet Inc. Class C last year the market was concerned about its competition with OpenAI and neglected it, but then its stock price skyrocketed." Meta Among the Big Seven, Meta's experience best reflects investors' skepticism about massive AI investments. CEO Mark Zuckerberg has made significant acquisitions and recruited talent, including investing $14 billion in AI company Scale AI and appointing the company's CEO, Alexandr Wang, as Meta's AI director, to realize the company's AI ambitions. This strategy initially had shareholder approval, but it didn't last long. In late October 2025, Meta raised its projected capital spending for the year to $72 billion, with a "significant increase" expected in spending for 2026. Following this news, the company's stock price plummeted. Looking back at 2025, while the stock hit a historic high in August, the price had seen a 35% increase, it had since fallen by 17%. For Meta, the key task in 2026 is to prove to the market that the massive investments are indeed driving profit growth. Tesla, Inc. In the first half of 2025, Tesla, Inc.'s stock was at the bottom among the Big Seven, but the situation reversed in the second half as CEO Elon Musk shifted the focus from sluggish electric vehicle sales to autonomous vehicles and Siasun Robot & Automation business, the company's stock price soared by over 40%. Following this rise, Tesla, Inc.'s expected P/E ratio reached an astonishing 200, second only to Warner Bros. Discovery, Inc. among the S&P 500 index components. After two years of stagnant revenue, the market expects Tesla, Inc. to resume growth in 2026. Data shows that while Tesla, Inc.'s revenue is expected to decline by 3% in 2025, it is forecasted to grow by 12% in 2026, and further climb to 18% in 2027. Despite this, Wall Street remains pessimistic about Tesla, Inc.'s stock performance in 2026. Analysts' average target price suggests a 9.1% decrease in Tesla, Inc.'s stock price over the next 12 months.