"The Magnificent Seven" investment boom wanes... domestic investors' interests diversify

Last month, domestic investors’ enthusiasm for major U.S. tech companies (the so-called “Magnificent Seven”) significantly cooled down within a month. The proportion of M7 in total U.S. stock investments also declined accordingly, confirming that investors’ interests are gradually shifting from these large IT firms to other sectors.

Data from the Korea Securities Depository shows that in December 2025, domestic investors invested a total of $3.66179 billion (approximately 5.3008 trillion KRW) in the seven representative U.S. tech companies. This is a 29% decrease from the previous month (November), when the buy settlement amount was $5.15544 billion (about 7.4589 trillion KRW). The Magnificent Seven refers to Apple, Amazon, Alphabet (Google’s parent company), Microsoft, Meta (formerly Facebook), Tesla, and NVIDIA, the seven giant tech stocks in the U.S.

The decline in their investment share is also reflected in their proportion of total U.S. stock investments. Domestic investors’ total buy-in for U.S. stocks was $25.77166 billion (about 37.2401 trillion KRW), with the Magnificent Seven accounting for only 14.21%. This is a 3.57 percentage point decrease from 17.78% last month.

By company, Tesla and Apple showed clear net selling trends. Tesla, which was actively bought by domestic investors as of November last year, experienced a net sell of $149.17 million in December. Apple also recorded a net sell of approximately $47.31 million. This is interpreted as some investors diversifying their holdings due to intensified internal competition among large tech companies and potential profit pressures.

In fact, foreign media previously reported that major U.S. hedge funds have been reducing their holdings of Magnificent Seven stocks since the second half of last year. This is seen as a cautious response to the risks of over-concentration in tech stocks, despite expectations for AI-related investments.

The securities industry generally believes that investment in large tech companies leading the AI era may slow in the short term, but this does not mean the trend itself is reversing. Yoo Ri-investment Securities analyst Heo Jae-hwan commented, “Although there are uncertainties surrounding AI technology, it is unlikely that infrastructure investments such as data center construction will suddenly halt.” However, he also pointed out the need to monitor structural changes brought about by increased competition among large tech firms and recommended shifting focus to industries outside the M7, especially those leveraging AI technology to enhance competitiveness, such as healthcare, manufacturing, and tech services.

This trend indicates that future domestic and foreign investors are likely to diversify beyond large tech stocks and expand their investment strategies to more varied industries and companies. Particularly, as the center of the U.S. stock market gradually becomes more balanced and dispersed, analysts believe that the timing to pay attention to the remaining 493 companies in the S&P 500 outside the M7 has arrived, and this view is gaining credibility.