The number seven is significant.
According to the Bible, God made the world in six days and rested on the seventh.
The Seven Wonders of the World is a list of notable structures from classical antiquity.
More recently, the “Magnificent Seven” (Mag 7) stocks – giant US companies at the forefront of tech – have dominated the market.
At their peak in October 2025, these seven companies – Alphabet Inc (NASDAQ: GOOGL), Amazon.com, Inc. (NASDAQ: AMZN), Apple Inc. (NASDAQ: AAPL), Meta Platforms Inc (NASDAQ: META), Microsoft Corporation (NASDAQ: MSFT), Nvidia Corp (NASDAQ: NVDA), and Tesla Inc (NASDAQ: TSLA) – had a combined market capitalisation of US$22 trillion, accounting for a whopping 36% of the total market capitalisation of the S&P 500.
However, their fortunes seem to have turned in 2026.
Investment advisor Roundhill’s Magnificent Seven ETF (MAGS), which provides equal-weight exposure to the Mag 7, is up by just 1.9% for the year to 30 April 2026, underperforming the S&P 500’s 4.4% rise.
The Mag 7 stocks are also highly valued.
Using MAGS as a proxy, the PE ratio of the group is 36, compared to 26 for the S&P 500 index.
Their sheer size makes it increasingly hard to achieve further gains.
What Are “Secondary” Tech Stocks?
The Mag 7 is falling behind other lesser-known or “secondary” tech stocks.
These players are not mega-cap stocks, but they are by no means small fry.
Although none has a market cap in the trillions – something all members of the Mag 7 have reached – they are still worth many billions each.
These companies include providers of infrastructure, software specialists, and participants in the semiconductor industry.
Secondary tech stocks are often able to grow earnings faster, from a smaller base.
They also tend to receive less attention from the investment community and media, and thus have more room for positive surprises and valuation re-ratings.
CoreWeave Inc (Nasdaq: CRWV) — The AI Infrastructure Enabler
CoreWeave provides a purpose-built, cloud-based platform that enables the full lifecycle of AI, from the training of large-scale models, to inference, movement of data and agentic workflows.
Its customers include large enterprises, AI labs, and tech companies who are deploying AI at scale across different use cases.
These customers pay CoreWeave to provide them with customised infrastructure for AI compute, often through long-term contracts.
CoreWeave benefits from rising AI demand, and although it competes directly against some of the Mag 7, some of them are also its customers.
The company has grown revenue at a breakneck pace, from US$229 million in 2023 to US$5.1 billion in 2025, up over 22x.
However, it remains in the red, with its operating loss worsening from US$14 million to US$46 million in the same period.
Looking ahead, CoreWeave says it has a revenue backlog of US$66.8 billion as of end-2025, with around 40% expected to be recognised in 2026 and 2027.
Assuming an equal distribution, this works out to around US$13 billion in revenue in 2026, more than twice 2025’s amount.
As of 30 April 2026, CoreWeave’s shares were trading 42.7% higher for the year to date (YTD).
Fortinet Inc (Nasdaq: FTNT) — The Niche Software Specialist
Based in California, Fortinet offers security professionals over 50 products focused on three areas: secure networking, hybrid work security (SASE), and AI-powered operations.
By targeting a segment with strong demand, Fortinet is able to enjoy a combination of strong revenue growth and margins.
In the software-as-a-service (SaaS) industry, a common metric is the “Rule of 40”, which states that a healthy SaaS company should have a combined revenue growth rate and profit margin exceeding 40%.
Fortinet has modified this to a “Rule of 45”, and says that it has achieved this for each year from 2020 to 2025.
It also expects to achieve this in 2026. In 2025, revenue grew by 14% year-on-year (YoY), while its operating margin was 36%.
To adapt to the AI era, Fortinet provides AI-driven security solutions to help clients upgrade their infrastructure and defend against advanced threats.
Fortinet’s stock price is up by 10.6% for the year to 30 April 2026, outperforming the average of the Mag 7.
ASML (Nasdaq: ASML) — The Semiconductor or Hardware Play
ASML produces extreme ultraviolet (EUV) lithography machines that foundries such as Taiwan Semiconductor Manufacturing Company (NYSE: TSM) use to manufacture the most advanced AI chips.
Demand for its lithography machines is likely to rise as the Mag 7 and others spend trillions of dollars to advance their AI goals, which will require the production of advanced chips that in turn require ASML’s machines.
In 2025, ASML recorded €32.7 billion in revenue, up 15.6% from 2024, at a 52.8% gross margin.
It expects this to rise to as much as €40 billion in 2026, which would represent a 22% increase, with gross margins of between 51% and 53%.
The semiconductor industry as a whole may surpass US$1 trillion in revenue by 2030, as AI adoption continues to rise.
ASML anticipates that advanced logic and memory processes will lead to rising demand for its advanced technology.
ASML’s total backlog in 2025 was nearly €39 billion, up from €36 billion in 2024.
The company’s NASDAQ-listed shares are 20.9% higher in price so far this year (as of 30 April 2026).
Get Smart: The Next Winners May Not Be the Biggest Names
We often refer to the performance of the overall market (the S&P 500, or the Nasdaq) when speaking of stock performance.
However, as our discussion of the performance of Mag 7 versus secondary tech stocks has shown, there are now significant differences between individual names.
As such, it’s important to diversify investments in the space, and also search for opportunities beyond the most obvious counters.
What makes investing challenging – and rewarding – is that trends can turn on their head quickly.
A renewed acceleration in earnings growth from the Mag 7, or a significant drop in their share price, could lead to them becoming relatively more attractive.
The Mag 7 remain powerful companies, and their members should, whether individually or as a group, remain a core part of a growth investors’ portfolio.
However, current conditions mean that market gains may come from a broader set of players, including secondary tech stocks.
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Disclosure: Silas H. does not own any of the stocks mentioned above.
