In the U.S. stock market, the influence of the so-called Magnificent 7 (M7) — Nvidia, Microsoft, Apple, Alphabet, Amazon, Meta, and Tesla — is weakening. As the artificial intelligence (AI) industry expands faster than expected, criticism has emerged that investment strategies centered on the existing big tech names are missing out on new beneficiary corporations.
According to Bloomberg News on the 28th (local time), Wall Street has recently been pushing various combinations such as "Fab 4," "Big 6," "Elite 8," and "Magnificent 10 (M10)" in a bid to identify the next generation of AI leaders.
In particular, Broadcom, Oracle, and Palantir are standing out on the back of rising demand for AI infrastructure and software. Oracle's share price has surged more than 75% this year thanks to growth in its AI cloud business, and Palantir has jumped 135%, the best performance in the Nasdaq 100. Broadcom, too, is being mentioned as a candidate for the "Elite 8" as semiconductor demand expands. By contrast, Apple and Tesla are seeing slower growth, prompting repeated assessments that they are falling behind in the AI era. Apple has yet to produce clear results in AI-related businesses, while Tesla is under pressure from slowing electric-vehicle sales and intensifying competition.
Experts acknowledge that the M7 still occupy an important position in the U.S. stock market. These corporations account for 35% of the Standard & Poor's (S&P) 500, and Bloomberg Intelligence, Bloomberg's in-house research unit, projects their profits will grow more than 15% through 2026. However, experts argue that it is no longer possible for them alone to represent the AI industry. Jurien Timmer, global macro director at Fidelity Investments, said, "As the AI story evolves, new winners can replace old ones," adding, "Even if the established giants continue to perform well, emerging companies can grow to a scale that cannot be ignored."
Wall Street has also grouped representative stocks of particular eras in the past to explain market trends. The "Nifty Fifty" of the 1960s, the "Four Horsemen" of the dot-com bubble, and "FAANG," which symbolized the smartphone and internet boom of the 2010s, are examples. But over time, these groups yielded to new technology leaders. Experts believe the same is inevitable in the AI era.
The Chicago Board Options Exchange recently formalized the new trend by unveiling the "M10" index. It adds Broadcom, Palantir, and AMD to the existing M7, and the constituents were selected based on leadership in AI and digital innovation along with liquidity, market value, and trading volume. Despite strong results and guidance this year, Oracle was not included in the index, but investors still count it among the leading AI beneficiaries.
Beyond Oracle and Broadcom, experts cite infrastructure and component corporations such as Taiwan's TSMC, Arista Networks, Micron Technology, and Western Digital as next-leader candidates. Palantir is drawing attention by capturing AI software demand while legacy software players like Salesforce and Adobe have slowed.
Meanwhile, some key corporations driving the growth of the AI industry remain unlisted, making them hard for investors to access. OpenAI is valued at about $500 billion but is still private, and Anthropic and SpaceX are in the same position. Wall Street expects the spread of AI to eventually move from infrastructure suppliers to software specialists, and, in the long term, to a broad range of industries that use AI to boost productivity and growth.
Jurien Timmer of Fidelity, the world's largest asset manager, noted, "The corporations leading the AI boom may become more expensive over time while their growth and cash flow can slow," adding, "The issue is that as leadership weakens, disruptive change can occur." He added, "For now, there are no signs of a bubble bursting, but it is still unclear whether the M7 era will end smoothly amid the tide of change or conclude with a shocking correction."