The man who coined the term “The Magnificent Seven” This refers to seven high-performance technology stocks. alphabet(googl-3.27%), Amazon (amzn-3.97%), apple (aapl-2.39%), nvidia (NVDA+0.30%), Microsoft (msft-1.47%), meta (Meta+0.66%), and Tesla (TSLA-3.66%) – I believe that that golden age is about to end, and that is due to the battle of AI driven by deepseek.
Michael Hartnett, Chief Investment Strategist of Bank of America (bac-0.43%) Global research in his latest memo warned that global dominance of the US stock market peaked in 2025 and is nearing its end.
Read here: Which stocks are in the Magnificent 7?
Arrival of deepseekthe Chinese artificial intelligence startup, which rivals Openai’s model, but clearly developed AI models at a cost and energy, has caused disruption to the stock market and led to major divestment in the technology sector. In his note, Hartnett showed that spending on artificial intelligence is expected to peak soon.
“American exceptionalism is very expensive and very well owned right now,” the strategist wrote. “Magnificent 7” becomes “Lagnificent 7” and supports the expansion of the US and global equity and credit markets. ”
Beyond AI, Hartnett believes other major drivers in the US market are wandering this year, including excessive financial support and immigration. He doubts our stocks will outperform the global market, citing the expected slowdown in government spending and the tighter immigration policy.
Although fiscal spending has been rising in recent years, President Trump is currently seeking massive cuts. Government Efficiency Bureau (DOGE)is currently led by Tesla CEO Elon Musk.
Instead of pursuing high US stocks, Hartnett advises investors to seek cheaper international markets. He said that stocks in Brazil, Germany, the UK and Canada offer higher returns than stocks on the Wall Street S&P 500 list.
