The long-awaited rotation in equity markets finally appears to be underway as investors shift capital away from the over-concentrated, high-flying Magnificent Seven tech stocks and into a broader array of opportunities, says global financial giant deVere Group.
For the past two years, the Magnificent Seven—Apple, Microsoft, Alphabet, Amazon, Tesla, Nvidia, and Meta—have dominated the markets, driving much of the gains in the S&P 500.
These titans surged more than 160% between 2023 and 2024, creating a market increasingly reliant on just a handful of stocks.
“But in 2025, that momentum has stalled. While the S&P 500 has edged up just 4% this year, with the Magnificent Seven barely moving, adding a mere 1%—with significant losses in Tesla, Microsoft, and Alphabet,” notes deVere Group CEO Nigel Green.
This is not a minor blip, says one of the world’s largest independent financial advisory and asset management organizations, it’s a structural shift. Several forces are driving the move away from the most overvalued tech stocks toward broader markets.
Nigel Green continues: “Valuation concerns are mounting, with Big Tech trading at stretched price-to-earnings ratios that may not be sustainable.
“Rising costs are also a factor, as these companies sink billions into AI infrastructure, cloud computing, and data centers, raising questions about long-term profitability.
“Higher for longer interest rates have further weighed on tech stocks, which are more sensitive to borrowing costs.
“Finally, after two years of extraordinary gains, investors are locking in profits and reallocating capital to undervalued areas.”
With capital flowing out of the tech behemoths, clear winners are emerging in both the US and international markets.
“UK large caps in energy, healthcare, and consumer staples are attracting capital, while a weaker pound has made UK exports more competitive, boosting large multinationals. US small caps are gaining momentum, often seen as a barometer of domestic economic health.
“Industrials and energy stocks are drawing fresh attention as AI hype cools slightly and tangible industries linked to infrastructure and transportation show resilience.
“At the same time, investors are seeking opportunities beyond the US, with emerging markets and European equities demonstrating renewed strength,” says Nigel Green.
For the past decade, growth investors have relied on the same playbook: pour capital into tech, ignore valuations, and ride the wave. That strategy is being challenged. Investors are now looking for diversification, value, and broader participation in market gains.
He concludes: “This isn’t the end for the Magnificent Seven. They remain among the most powerful, cash-rich corporations in the world. But their ability to dictate the entire market’s trajectory is diminishing.
“Those who recognize and act on this shift early will be best positioned for the opportunities ahead. The great rotation has begun.”
deVere Group is one of the world’s largest independent advisors of specialist global financial solutions to international, local mass affluent, and high-net-worth clients. It has a network of offices around the world, more than 80,000 clients, and $12bn under advisement.
