Magnificent 7 ETF Sees Surge in Outflows as Investors Shift to DRAM
U.S. investors are pulling money from the Magnificent 7 ETF and rotating into DRAM plays amid persistent weakness in mega-cap tech stocks.
U.S. investors are abandoning the Magnificent 7 trade at an accelerating pace, with outflows from the MAGS ETF surging as most of the bloc's constituent stocks continue to languish well below their all-time highs, according to Benzinga. The rotation signals a meaningful shift in sentiment among retail and institutional players who once treated the group as a near-guaranteed source of outperformance.
The selloff reflects a broader reckoning with the lofty valuations that defined the Magnificent 7 — Apple, Microsoft, Nvidia, Alphabet, Amazon, Meta, and Tesla — during their historic run. With several of these names still deeply underwater from their peaks, investors appear unwilling to wait out a recovery and are instead seeking momentum elsewhere.
DRAM-linked assets have emerged as one of the key destinations for that redirected capital, suggesting that market participants are hunting for exposure to the semiconductor memory cycle rather than staying locked into the mega-cap AI narrative that turbocharged the Magnificent 7. The pivot could reflect expectations that memory chip demand is poised to outpace the broader AI infrastructure buildout theme that had dominated portfolio construction.
The trend underscores how quickly market leadership can shift when high-profile trades begin to crack. For months, the Magnificent 7 served as the default growth engine for U.S. equity portfolios, but sustained underperformance relative to all-time highs appears to be eroding that conviction faster than many analysts anticipated. Whether this rotation proves durable or marks a tactical repositioning remains an open question for traders heading into the next earnings cycle.
Continue reading at Benzinga.