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Mag-7 (+3.8%) rose for a third straight month, ahead of the S&P500 (+0.3%) but behind the NASDAQ (+4.6%). META (+25.3%) led on the launch of Muse, its paid personal AI agent, and NVDA (+5.0%) gained on new Anthropic compute deals using its GPUs. AMZN (-2.3%) and TSLA (-0.4%) fell on a US ad pricing lawsuit and a weak Cybercab launch.
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We maintain OVERWEIGHT on the Mag-7. Investors favoured AI that already charges users over AI yet to earn revenue. META’s Muse agent charges US$20 or US$100 a month, its first direct consumer AI revenue. TSLA’s Cybercab, a driverless robotaxi and its main way to earn from self-driving AI, launched with no fleet size, price or timeline.
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The Mag-7 index trades at 24x forward earnings, with earnings growth of 32%/30% for FY26e/27e. It trades below its 10-year average of 30.5x and below -1SD, while still making up ~36% of S&P500 market cap. Our top Mag-7 pick remains GOOG at 17.4x forward earnings, the cheapest in the group and less than half the group’s average, with the fastest cloud growth among CSPs over the past five years.
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