I Magnificent Seven this year I am a little less magnificent, largely overtaken by the performances of other markets, while the Chinese mouse has arrived to annoy the hitherto unchallenged giants DeepSeekInsiders are convinced that much of the future of this small group of stocks, which still has a spectacular market capitalisation of 16 trillion dollars, lies in the hands of Nvidia, which will publish its fourth quarterly report, ending on January 31, 26 next February, with the market closed: the accounts, but above all the outlook, will be a very important test for all the Magnificent Seven.
European stock exchanges and Wall Street overtaking
Microsoft, Nvidia, Tesla, Meta Platforms, Apple, Alphabet and Amazon, the seven knights who have ridden the US stock markets with triple-digit gains in recent years are now biting the bit. Bloomberg has developed a specific index to highlight their performance and it appears that since the beginning of the year it has seen an increase of 1%: an increase all in all very content after we had become accustomed to stellar leaps and faded in comparison to the excellent performance with European stock exchanges and of the same Wall Street
In fact, at the beginning of 2025 there are at least seven important bags that have accumulated a gain of more than +10%. Five are in Europe (France, Germany, Italy, Spain, Switzerland), one is in South America (Brazil), one in Asia (Hong Kong).
Not only that. Even when compared with the results of the major Wall Street indices, the MF7 Index is a loser. Dow Jones, S&P500 and Nasdaq have recorded quadruple performances. At the sector level, other Wall Street sectors have managed to attract greater interest for different reasons, for example US Banks, up +10% since the beginning of 2025 in the wake of a more resilient than expected rate scenario.
DeepSeek, the pebble in the US tech giant's gear
Analysts are wondering what caused the new movement. Certainly, the one that put a stone in the big wheel of the US technology giants was thesudden irruption in the world ofArtificial Intelligence, of the startup Chinese Deepseek which proposed products with the same capabilities, but at significantly lower costs. This has begun to raise doubts about the sustainability of the trend of growth in profits of US big tech companies in this business.
But precisely theartificial intelligence made in China low cost, it also has moved investors in the sector in the last month who have packed up, exited the US market and taken a position in the AsianHong Kong's Hang Seng Index has continued to rise in recent weeks, accumulating a 14,3% gain since the beginning of the year, driven by its technological sector and from its stars: Alibaba and Xiaomi grew on the stock market by +50% and +37% respectively. Furthermore, analysts observe that the effects of the trade war unleashed by Trump, already widely discounted in the prices of tech stocks in markets outside of Wall Street, are perhaps not yet fully absorbed by the MF7.
The Future of US Tech in Nvidia's Hands: The Outlook on February 26
The eyes of all US tech players are now focused on Nvidia which could be the litmus test for theentire sector: will publish the fourth quarter (ended January 31) on 26 next February, with the market closed. I accounts, But especially the outlook, of the absolute protagonist of the artificial intelligence revolution will be a very important test bench for all sevenInvestors will be looking to see if Nvidia will be able to maintain its extraordinary growth trajectory amidst emerging competition from DeepSeek and market dynamics.
Despite growing uncertainty, major tech companies have so far doubled their investments in AI. Meta Platforms, Alphabet and Amazon have announced record capital spending plans for 2025. Meta plans to spend up to $65 billion on AI infrastructure (up from $39,2 billion last year), A forecasts 75 billion. Amazon intends to exceed 100 billion. Nvidia's financial performance has been impressive so farIts most recent quarterly results highlighted the'huge question of Artificial Intelligence processing solutions. In third fiscal quarter Nvidia reported record data center revenue of $30,8 billion, up 112% year over year. Total revenue reached an all-time high of $35,1 billion, up 93,6% from the previous year, while net income rose 108,9% to $19,3 billion.
Now for Nvidia the consensus of analysts collected by Bloomberg expects net profits of $38,1 billion, up 9% from the third quarter and up 72% from a year earlier. EPS is projected at $0,79, up 61,2% year-over-year. The primary catalyst driving Nvidia's prospects continues to be question unprecedented AI processing infrastructure. Bank of America expects Nvidia to narrowly beat fourth-quarter earnings expectations and that near-term headwinds could weigh on its outlook for the current first quarter.
Will Blackwell’s latest release catalyze demand for AI?
The latest architecture Blackwell of the company, released in late 2024, in particular the so-called GB200 NVL72 system, offers 30 times faster performance capabilities than previous generations for AI inference tasks, positioning Nvidia at the top for maintain its market leadershipThe company's dominant position in the data center GPU market, where it has captured a surprising market share of 98% in 2023, provides a solid foundation for continued growth. The H100 GPU was the AI data center chips most in demand globally in 2023, later replaced by the H200 and now by the entire new generation of GPUs based on Nvidia's Blackwell architecture. Recently Nvidia's CEO, Jensen Huang, spoke of a “crazy” question following Blackwell's exit, which suggests a good market reception.
