Microsoft Dropped from Magnificent Seven as Investors Lose Faith

The 'Magnificent Seven' stocks refer to Apple (AAPL), Amazon (AMZN), Alphabet (GOOG, GOOGL), Meta Platforms (META), Microsoft (MSFT), Nvidia (NVDA), and Tesla (TSLA). These companies were leading the market in 2023 due to their tech-led performance during the post-pandemic recovery.

However, things have changed since then. Amazon, Microsoft, and Tesla have underperformed the S&P 500 for the past year. Investors are concerned about Amazon's heavy spending on AI infrastructure and its declining cloud computing market share.

Microsoft's Azure business has seen 43% growth, but the company's cost and capacity to deliver may be a concern. Its lack of traction in the AI chat-based assistant front is also a worry.

The author advises steering clear of Microsoft due to these concerns.