The "Magnificent Seven" Stocks Explained: Apple, Microsoft, Nvidia, Alphabet, Amazon, Meta, and Tesla. Here's the 1 I'm Selling.
2026-09-26 09:35
•James Brumley •The Motley Fool
•••••• •••••••••• Axe Cap view
Why We're Selling Microsoft and Watching the Rest of the Magnificent Seven
Microsoft’s AI hype feels shaky compared to its peers, prompting caution on SA-linked tech exposure.
The so-called Magnificent Seven have carried global markets for years, but not all are equally robust. Microsoft’s impressive Q2 Azure growth and $678 billion AI backlog sound good on paper, yet cracks are appearing. Its Windows market share shrinks, the Copilot AI lags behind Google’s Gemini and OpenAI’s ChatGPT, and Xbox revenue is falling. The core worry: Microsoft’s AI revenue is still mostly speculative. This contrasts with Nvidia, whose chips are essential for AI, and Alphabet, pushing ahead with Gemini. For South African investors, Prosus and Naspers offer indirect exposure to this AI race, but Microsoft-heavy positions feel riskier given the uncertainty. On the currency front, sustained rand weakness (USD/ZAR) could inflate local tech valuations further, so prudence is warranted. If enterprises pull back on AI spending amid economic pressure, Microsoft’s shiny metrics could disappoint hard. this is just our opinion and not financial advice
Trim Microsoft exposure from your portfolio. Consider holding Nvidia or Alphabet indirectly via Prosus and Naspers for a cleaner AI play with better momentum. Keep an eye on USD/ZAR moves for local valuation cues.
- MSFT
- USD/ZAR
- Prosus
- Naspers
- AI monetization surprises positively for Microsoft
- Rand unexpectedly strengthens sharply, affecting valuations
7/10
The article examines the 'Magnificent Seven' tech stocks and identifies Microsoft as the one to avoid or sell. While Microsoft showed strong Q2 results with 43% Azure growth and $678 billion in AI backlog, the author expresses concerns about the sustainability of its AI business, declining Windows market share, weak Copilot adoption compared to competitors, and underperforming Xbox revenue. The bullish case relies heavily on uncertain AI monetization that may not materialize as expected.
Our take is based on reporting first published by The Motley Fool.