The “Magnificent Seven” stock group has demonstrated their superiority over the entire stock market, as their performance has consistently outpaced all market players for almost ten years.
The elite group achieved an astonishing 875% return from 2016 until the end of 2025, which has also surpassed the 235% return of the S&P 500. Throughout the years any investor who bought them achieved exceptional profits.
However, the stock market operates in a way that brings down all stocks including the most successful ones as well, which has caused two major technology companies to sell at prices that are substantially lower 10% than their peak values. This has created special buying opportunities for the investors.
Microsoft’s Pullback is Temporary
Microsoft announced its second quarter fiscal 2026 results of $81.3 billion revenue, which increased by 17% year over year, while its net income reached $38.5 billion or $5.16 per share. The numbers should drive the stock price upward, but it currently trades 21% lower than its highest historical point. The market uncertainty exists because Microsoft invests heavily in artificial intelligence and data center projects.
The $37.5 billion quarterly expenses creates a financial burden, which causes investors to experience doubt about their investments. However, the company uses this money to develop its operational abilities, which create permanent assets.
Microsoft will transform its current expenses into future business growth, once demand for its hardware systems increases and existing hurdles are resolved. Businesses that operate at their highest level of success often show their worst performance just before they reach its next major milestone.
Tesla’s Stock Slump & Vision
The electric vehicle market has become highly competitive, as tax incentives expired and the company delivered only 418,227 vehicles during the fourth quarter of 2025, which marked a major decrease from the previous year.
The numbers produce a painful impact for a company that established its identity through electric vehicle dominance. The stock has dropped 13% from its peak value, which shows that investors doubt the demand for vehicle sales.
However, Tesla has expanded its business operations beyond its car production activities, which demonstrates their new strategic direction. Elon Musk believes that robotics development and autonomous system creation will generate more profitable business opportunities for the company. The Fremont production facilities will undergo equipment redesigns to create Optimus robots, with a production target of 1 million units.
Tesla is working on developing vehicles that can drive themselves, along with creating a robotaxi system, which will convert personal vehicles into money-making machines. The current electric vehicle market decline will become a minor event, if any part of that future plan is achieved.
Why Microsoft & Tesla?
The current worth of Microsoft and Tesla as investment options is derived from their historical record and the existing market assessment of their future growth potential. On one hand, Microsoft is facing financial penalties, because the company dedicated too much resources to developing essential future technologies.
On the other hand, Tesla faces a market reduction, because it is currently facing short-term difficulties, while executing its most ambitious corporate transformation project. The two companies represent different business risks, but they both operate as high-quality companies whose market value currently sits below maximum investor trust.
Bottom Line
The Magnificent Seven established their reputation through continuous development. The market provides no immediate benefits to Microsoft and Tesla, which are currently going through their transitional periods.
However, long-term investors find these pullbacks as opportunities rather than any sort of warning indicators. The most outstanding stocks experience such temporary price reductions, because their narrative continues to develop, rather than their story reaching its conclusion.
