The Magnificent 7 stocks Tesla, Amazon, Alphabet, Meta, Nvidia, Microsoft, and Apple posted a sharp 16% decline in the first quarter of 2025. According to a note from Deutsche Bank, the group lost over $2.4 trillion in market value, reversing the strong gains seen during the 2024 rally.
The fall reflects a shift in sentiment around US tech stocks, which had surged on the back of AI stock hype and easing regulation talk. But by March, doubts began to grow. Investors started questioning whether the AI boom had peaked, sending all seven companies into negative territory.
Tesla Stock Drop and Nvidia’s AI Struggles
Tesla stock saw the biggest loss, down 36% over the quarter. The company’s market cap dropped from $1.5 trillion to about $800 billion, mainly due to slowing auto sales especially in Europe. It was the worst performer among the Magnificent 7.
Nvidia stock, which had jumped 171% in 2024, lost 17% in one day after investors raised concerns about the long-term strength of its position in AI chip dominance. Alphabet dropped 18%, Amazon stock fell 14%, Microsoft slid 11%, and Apple stock dropped 15%, partly due to a possible investigation from Beijing.
China Tech Surges as US Tech Falls
While US tech stocks lagged, China tech stocks gained over 20% in Q1. Deutsche Bank pointed out that the leadership in global tech may be shifting. In contrast, the broader US tech sector lost 7.7%.
Looking forward, analysts expect some stability but warn that high valuations, macro risks, and global tech competition especially in AI could weigh on performance. AI stocks in China and Europe are gaining ground, creating more pressure for US firms.
Despite the short-term drop, Deutsche Bank says the Magnificent 7 remain highly profitable. But with rising threats from abroad, their future leadership in AI and big tech innovation is no longer guaranteed.
