The Financial Times (FT) reported on June 29 (local time) that the Magnificent 7 (M7)—a group of companies that once led the U.S. stock market—has seen its market capitalization shrink by $2.3 trillion (approximately 3,600 trillion won) this month alone, as the market continues to focus heavily on semiconductors.

The M7 consists of Nvidia, Alphabet, Apple, Microsoft (MS), Meta Platforms, Amazon, and Tesla.

The average stock price of the M7 has fallen by about 10% this month.

If this trend continues, it is projected to mark the largest monthly decline in over a year.

The FT noted that the stock price decline was largely driven by growing skepticism regarding the ability of hyperscalers—such as Amazon, Microsoft, Alphabet, and Meta—to monetize their astronomical investments in artificial intelligence (AI).

Furthermore, the pressure on the operating margins of big tech companies has been highlighted by soaring costs for key components due to semiconductor supply shortages.

Simone Ragazzi, a global equity manager at global asset management firm Algebris, said in an interview with the FT, "We have no exposure to the M7, except for some remaining shares in Nvidia," adding, "The market is questioning when these massive investments will actually translate into tangible revenue growth."

Vincenzo Vedda, Chief Investment Officer (CIO) at asset manager DWS, pointed out, "We are witnessing a shift in market leadership from the software and internet-centric M7 to the semiconductor and infrastructure hardware sectors."

Giles Parkinson, head of equities at investment firm Trinitas Bridge, stated, "The M7 is no longer a single group, but is fragmenting into companies with very different characteristics."

He noted that the hyperscalers within the M7 are showing the most consistent stock weakness, explaining that a structure has emerged where their massive investments are primarily benefiting semiconductor manufacturers and infrastructure companies.

The FT also analyzed that news of companies like Walmart and Uber limiting their use of AI tools due to costs is acting as a negative factor for hyperscalers.

This is because if many companies increase their adoption of lightweight, low-cost AI models and reduce AI spending due to cost burdens, it will inevitably signal trouble for the hyperscalers' investment recovery prospects.

On the other hand, investors' attention remains fixed on the "semiconductor supercycle," which is gaining momentum from the semiconductor supply shortages caused by expanded AI investment.

The Philadelphia Semiconductor Index, which tracks global semiconductor companies listed in the U.S., has surged 93% in the first half of this year alone.

This is the steepest rise since 1999, when the dot-com bubble was at its peak.

(Photo: AP, Yonhap News)