Magnificent Seven “Only” Up 23% in 2025: A Bull Market Problem

A quick glance at recent headlines for the Magnificent Seven would make casual readers think the group had negative returns in 2025.

Bloomberg: Magnificent 7’s Stock Market Dominance Shows Signs of Cracking (1/11/26)

Fortune: The Magnificent 7 isn’t that magnificent: 5 of the stocks have underperformed the market this year (12/15/2025)

The Street: Forget the Magnificent 7, it’s now the Magnificent 2 (1/2/2026)

The Chronicle: The Great Rotation: Tech Megacaps Stumble as the 'Magnificent Seven' Drag Down Major U.S. Indices in Late 2025 (12/29/2025)

People are again asking if the actual stocks in the Magnificent Seven are still “magnificent”. 

Despite the Magnificent Seven outperforming the broader market by ~5% in 2025, many investors argue the returns still weren’t good enough after two years of dominance. In our view, this reflects a classic bull market problem: expectations reset higher after outsized gains, making strong absolute returns feel like underperformance.

There & Back Again

After returning 64% in 2024, expectations for the Magnificent Seven entered 2025 at euphoric levels. What followed was a reset. The group fell nearly 34% from its December 2024 highs amid tariff-driven macro shocks, only to fully retrace the drawdown within 60 trading days and rally more than 77% to new highs.

The group is now at a similar juncture as 2026 begins: off all-time highs with skepticism growing.

Are Pauses in Uptrends Normal?

Corrections are normal in the stock market, and so are consolidations in uptrends. The Roundhill Magnificent Seven ETF (MAGS) is not an exception to the rule. On a calendar-year basis, MAGS was up “only” 23% in 2025, but that framing ignores the reality that the group is digesting a >75% move in just over six months. In our view, this pause is a healthy and necessary period of time for the Magnificent Seven and it could not come at a better time for stocks.

When the Magnificent Seven were pausing in the first couple weeks of 2025, the S&P 500 Equal Weight Index had been correcting since November, providing little support for the overall market to stay on trend. In 2026, the Magnificent Seven have the benefit of the S&P 500 Equal Weight Index trading at all-time highs, showcasing healthy bull market participation.

Where From Here?

From a positioning standpoint, MAGS is off roughly 4% from its December highs. The fund currently sports an RSI of 49.6 and trades more than 10% above its 200-day moving average, a level we view as long-term trend support.

Intra-stock correlations across the Magnificent Seven have fallen sharply, signaling that the stocks are no longer moving in lockstep with one another.

As correlations fall, return dispersion tends to rise. The gap between weekly winners and losers across the Magnificent Seven has subtly begun to widen, underscoring a regime where stock selection risk could be increasing.

If this low correlation regime persists throughout 2026, return dispersion across the group could rise meaningfully. In that environment, balanced exposure to the Magnificent Seven becomes increasingly valuable, a setup where MAGS is designed to step in.

The Roundhill Magnificent Seven ETF (MAGS) offers investors diversified exposure to the Magnificent Seven, reducing concentration risk while capturing the performance of the group’s broad leadership trends.

To learn more about MAGS: https://www.roundhillinvestments.com/etf/mags/

Explore our research blog: https://blog.roundhillinvestments.com/

Investors should consider the investment objectives, risk, charges and expenses carefully before investing. For a prospectus or summary prospectus with this and other information about Roundhill ETFs please call 1-855-561-5728 or visit the website at www.roundhillinvestments.com/etf/MAGS. Read the prospectus or summary prospectus carefully before investing.

Investing involves risk, including possible loss of principal. The Fund expects to have concentrated (i.e., invest more than 25% of its net assets) investment exposure in one or more of the Technology Industries at any given time, which may vary over time. Further, the Fund expects to obtain such investment exposure by transacting primarily with a limited number of financial intermediaries conducting business in the same industry or group of related industries. As a result, the Fund is more vulnerable to adverse market, economic, regulatory, political or other developments affecting those industries or groups of related industries than a fund that invests its assets in a more diversified manner. The value of stocks of information technology companies and companies that rely heavily on technology is particularly vulnerable to rapid changes in technology product cycles. Please see the summary and full prospectuses for a more complete description of these and other risks of the Fund.

Roundhill Financial Inc. serves as the investment advisor. The Funds are distributed by Foreside Fund Services, LLC which is not affiliated with Roundhill Financial Inc., U.S. Bank, or any of their affiliates.