Author: Anthony Pompliano, founder and CEO of Professional Capital Management; Compiler: Shaw, Golden Finance

In the past few years, the "Magnificent 7" (Magnificent 7, the seven leading technology stocks in the U.S. Apple, Microsoft, Nvidia, Google, Amazon, Meta, Tesla) stocks have been the core source of investment income for millions of American investors. But these targets that were once highly sought after by the market are no longer popular.

Carson Group analyst Ryan Detrick said: "Since the beginning of this year, the seven major technology giants have fallen as a whole, while the remaining 493 stocks in the market have increased by more than 13% during the year. This is the most unexpected market situation so far this year. Not long ago, the core question everyone discussed when communicating with clients was: Why not all of these seven stocks?"

Fortunately, the index market is supported by all constituent stocks. The remaining 493 stocks have driven the S&P 500 Index to rise by 9% since the beginning of 2026, maintaining the overall positive trend. However, it is rare for stocks across the market to rise broadly and jointly create profits for investors.

Lance Roberts pointed out: "A study covering 1926 to 2025 showed that only 41% of U.S. stocks outperformed short-term Treasury bills during their listing duration; only 46 companies contributed half of the market's cumulative $91 trillion in wealth growth."

Understanding this historical pattern is certainly of reference significance, but it does not excuse the current weak performance of the "Big Seven".

Looking back in hindsight, this wave of selling and weakening market conditions were not unexpected. The market capitalization of these seven stocks once accounted for more than 30% of the S&P 500 Index, which is enough to reflect their overwhelming industry dominance compared with their peers. Some people think that the relative downturn in the past six months is just a cooling off of the market. Although this statement has some truth, I do not think this is the only reason why these star stocks suddenly lost their upward momentum.

The more core incentives are likely to come from two aspects: Firstly, the Iran conflict has pushed up inflationary pressure (additional note: growth stocks are long-term assets and are highly sensitive to factors such as inflation and interest rates); secondly, the expected return on investment corresponding to the crazy capital expenditures of major cloud vendors is questionable, and the market is full of disagreements about this.

Any secondary market investor I talk to will ask me how I think the penetration rate of artificial intelligence will slow down. A large number of investors are extremely anxious and even subjectively imagined an extreme risk scenario: the global market will suddenly no longer recognize the value of this new technology.

I obviously do not share these pessimistic concerns, and believe that the rate of adoption of artificial intelligence will continue to accelerate from now on. But my opinion cannot support the stock prices of the seven giants in the U.S. stock market, nor can it stop investors from transferring funds to small and mid-cap stocks that are cheaper in terms of valuation.

One more thing to note: The seven giants in the U.S. stock market have experienced magnificent market conditions in the past few years, relying on extremely loose fiscal and monetary policies. A series of aggressive policies have pushed up asset prices across the board, with gains in these seven companies exceeding the expectations of even the most optimistic bull investors. Trillions of dollars of currency investment combined with a zero interest rate environment can be called the best bull market catalyst in history.

However, investors who hold the stocks of the seven largest US stocks do not need to be pessimistic for a long time. Various types of radical easing policies are returning again. Charlie Bilello wrote: "It has been less than a year since the debt ceiling was last raised by $5 trillion, and the U.S. national debt has increased by more than $3 trillion during this period. At this growth rate, we will usher in a new round of debt ceiling negotiations in 2027."

The U.S. government simply cannot control spending and will only continue to increase fiscal spending. No matter how much fiscal revenue tax revenue can bring, as long as it is not enough to support its various spending plans, the remaining gap will be filled directly by printing money. Anyone with any sense knows that adding US$3 trillion in national debt each year cannot be sustained in the long term, but right now everyone is pretending that everything is fine and allowing the situation to continue to get worse.

Therefore, the money printing press will continue to run at full capacity, just to support investors' asset portfolios and drive market value higher. Don’t believe it? Just look at the S&P 500 and the Fed's balance sheet to see this. If you have ever considered yourself a stock market master who does not rely on the Federal Reserve to release money and earns floating profits based on his own ability, then this set of trends may subvert your cognition.

But in my opinion, the more critical question is: Can the operating data of these companies convince me that the market outlook is expected to pick up?

The answer is yes.

Barry Schwartz pointed out: "The profit margins of the S&P 500 index stocks have increased by 58% since 2011, and the historical price-to-earnings ratio valuation range has lost its reference significance." I agree with his point of view. Nowadays, the revenue growth rate of companies with a market capitalization of trillions can reach 50% year-on-year. If we compare the stock valuation levels before the advent of the iPhone, it is no longer of much reference value.

A company of this size and with such a high growth rate was completely unimaginable in the past. This is the result of the digital economy - capital and information can flow at the speed of light. The operational efficiency of all walks of life has accelerated across the board, and the pace of corporate profit growth and valuation increases has also accelerated.

This kind of growth acceleration can bring excess returns to investors. Charlie Bilello gave data: "So far in 2020, the S&P 500 Index has increased at an annualized rate of 15.6%, and is expected to have its best ten-year performance since the 1990s."

The root cause of the weakening of the U.S. dollar and the differentiation of the K-shaped economy is also making investors a lot of money, so it is difficult for investors to complain about this. One more point: Various stimulus policies have artificially boosted the U.S. economy, and stock assets (especially the seven major U.S. stocks) will continue to benefit from them. It is not difficult to understand why there is no large-scale panic in the market.

Investors have already formed an inherent understanding: the Federal Reserve and the US government will basically cover the income from financial investment. Investors only need to remain rational, dare to invest principal, and hold for a long time to follow the market trend.