The Magnificent Seven keep tightening their grip on Wall Street's benchmark index but the profit math tells a different story.
Together, Amazon (NASDAQ:AMZN), Alphabet (NASDAQ:GOOGL), Microsoft (NASDAQ:MSFT), Meta (NASDAQ:META), Nvidia (NASDAQ:NVDA), Apple (NASDAQ:AAPL), and Tesla (NASDAQ:TSLA) now account for 34.2% of the S&P 500's market cap, according to Creative Planning. That's more than one-third of the index. Yet their combined profits represent only 26.6% of the total pie.
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The split is most striking with Nvidia. The chipmaker makes up 8.1% of the S&P's value, but delivers just 3.8% of its profits. On the flip side, Alphabet is underpriced by comparison only 3.9% of the index's weight, while churning out 5.7% of profits.
The widening gap underscores a tension in today's market: mega-cap tech's influence on valuations versus the earnings power to back it up. For investors, it's a reminder that even the market's most powerful stocks aren't all pulling equal weight when it comes to profits.
This article first appeared on GuruFocus.
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Magnificent 7 Dominate S&P 500's Weight But Lag on Profit Power
Published 2 months ago
Aug 19, 2025 at 9:39 PM
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