Analyst Urges Dropping Microsoft From Magnificent 7 as Stock Falls 13% on AI Slippage
Updated
Updated · 24/7 Wall St. · May 26
Analyst Urges Dropping Microsoft From Magnificent 7 as Stock Falls 13% on AI Slippage
1 articles · Updated · 24/7 Wall St. · May 26
Microsoft is being singled out as the weakest Magnificent 7 member, with one analyst arguing the group should become a Magnificent 6 after the company fell 13% this year.
The call centers on AI: Microsoft’s once-advantaged OpenAI tie-up has weakened, and its license to OpenAI models and products now runs through 2032 on a non-exclusive basis.
That shift leaves Microsoft looking less dominant as Nvidia tightened its grip on AI chips, Amazon pushed AI through AWS, Google spread Gemini across its ecosystem, and Meta used AI to lift ads and engagement.
The broader backdrop is underperformance across the megacap cohort: the Magnificent 7 are up 5% this year, trailing the S&P 500’s 9% gain despite a combined market value above $20 trillion.
The analyst’s broader argument is that Microsoft now lacks a clear AI edge in both consumer and enterprise markets, while no other trillion-dollar tech company appears strong enough to replace it.
As Microsoft's AI losses mount, can its new strategy justify a $190 billion investment?
With Microsoft's OpenAI bet failing, is the era of the 'Magnificent 7' now over?
Is Microsoft's AI stumble a strategic pivot to ultimately dominate the enterprise market?