Magnificent Seven lose $2.3 trillion in June spending doubts

A group of seven of the world's largest technology companies, known as the Magnificent Seven, has collectively lost trillions of dollars in market value in recent weeks, driven by growing investor skepticism over the returns from massive artificial intelligence infrastructure spending. The selloff, concentrated in June, has seen these stocks significantly underperform the broader market.

The cohort-Microsoft, Nvidia, Alphabet, Apple, Meta, Tesla, and Amazon-has declined more than 13% since mid-May. In June alone, the group shed approximately $2.3 trillion in market capitalization, with the CNBC Magnificent 7 Index down roughly 10% for the month. This contrasts with a modest 2% pullback in the S&P 500 over the same period. Microsoft and Tesla have been hit hardest, each falling more than 30% from their respective 52-week peaks.

The primary catalyst is a fundamental shift in how these companies allocate capital. Once celebrated for generating substantial free cash flow, they are now channeling hundreds of billions of dollars into building data centers and purchasing advanced semiconductors. Collectively, Amazon, Microsoft, Alphabet, and Meta have committed nearly $700 billion in...