Why the Mag 7 Trade Is Played Out

For more than two years, the mega-cap “Magnificent Seven” tech stocks have dominated the market and demanded investors’ attention…

Since the end of 2022, Nvidia Corp. (NVDA) shares soared an incredible 742% to become the largest company in the world by market capitalization.

Facebook’s parent company, Meta Platforms (META), wasn’t far behind with a 516% gain.

Even Microsoft (MSFT) has seen its shares rise 65%.

The driving force behind all these massive gains? Artificial intelligence (AI).

It has emerged as a colossal new mega trend … one with the power to reshape our world and add $15 trillion to the global economy by 2030.

As a result, tech’s biggest names have emerged as early leaders in the race for AI dominance.

Mag 7 companies are pouring billions into new research and setting concrete timelines to develop and market their latest AI gadgets.

But so far, it’s still anyone’s game.

After all — none of the Mag 7 companies have delivered a “Killer App” that will turn AI into something users can’t live without.

There are plenty of promising projects, but it could still take years for them to reach maturity. That’s why investors are focusing so heavily on the “AI picks & shovels” play, which is NVDA. Regardless of who makes the next big breakthrough, they’ll need an army of Nvidia GPUs to do it.

Except, that might not be the case…

A Warning Bell for Main Street Mag 7 Investors

Two weeks ago, Chinese AI firm DeepSeek turned the tech world on its head with a breakthrough announcement.

They’d developed a new AI that could rival ChatGPT for a fraction of the cost, which only required a fraction of the processing power.

This announcement sent shares of Nvidia (NVDA) into an instant tailspin, with the stock crashing 17% and shedding a record-breaking $600 billion in market cap before the closing bell.

And it wasn’t just a one-day market shock, either…

Year-to-date, NVDA is actually down 3%.

Meanwhile, its next-generation AI competitor, Palantir (PLTR), gained more than 54% in the same period.

These were the two best-performing stocks in the S&P 500 last year — and one of them has gone completely off the rails.

That might seem hard to believe after every “genius” on Wall Street piled into NVDA shares at sky-high valuations.

But as I explained on Tuesday, Cisco followed almost this exact same trajectory in the early stages of the internet revolution…

Much like Nvidia, it was a key hardware provider for early internet companies. Investors spent years bidding the shares higher before reality set in, and the stock crashed.

In fairness to the professionals on Wall Street, most probably got out soon after shares started to slide. Instead, it was the more passive investors — the retirees, pension funds and index investors who ended up losing a few hundred billion dollars.

I’m not saying that NVDA is destined to repeat Cisco’s disastrous performance over the last 25 years … but the warning signs are certainly there. And if you’re prepared for it as an investor, there’s actually an opportunity for a massive windfall here.

I’ve just released a new video presentation detailing ALL of my research on Nvidia’s ongoing meltdown and the surprising new generation of “Magnificent” stocks now emerging to take the lead in the AI revolution.

You can watch it for free here: