Shares of the Magnificent Seven technology companies fell sharply this week as investors weighed heavy spending by hyperscalers on artificial intelligence infrastructure against uncertainty in the global economy following the resumption of hostilities in the Iran war.

The group posted its largest one-day decline in more than a year on Thursday. Bloomberg reported that an index tracking the Magnificent Seven fell 4.8%, erasing about $787 billion in market value. It was the steepest single-session drop for the group since April 2025.

According to the report, the Magnificent Seven index was about 11% below the record high it reached in late May as of Thursday’s close, with roughly $2 trillion in market capitalization wiped out. The seven companies — Apple, Microsoft, Nvidia, Alphabet, Amazon, Meta, and Tesla — together account for a disproportionate share of the S&P 500's weight, meaning broad market benchmarks are heavily influenced by their performance.

As of Friday morning, six of the seven stocks were lower over the previous five trading days. Tesla was down more than 19%, while Google parent Alphabet fell 8.5%, Amazon declined 6.3%, Meta dropped 6%, Microsoft slipped 1.3%, and Apple was down 0.4%. Nvidia was the exception, rising about 1.9% over the same period.

The sell-off in technology shares accelerated after Alphabet and Tesla released earnings reports following Wednesday’s trading session, with both companies outlining large capital expenditure plans for the year.

Alphabet said it plans to spend about $200 billion on capital expenditures this year, up from an earlier estimate of $190 billion. Bloomberg reported that the increased spending on AI data centers and infrastructure contributed to the company’s quarterly cash flow turning negative for the first time since Google went public. Microsoft, Amazon, and Meta have also signaled multi-billion-dollar AI infrastructure commitments for the year, underscoring a sector-wide buildout that is pressuring near-term financials across the group.

"Alphabet's higher investment outlook helps reinforce our view that the AI infrastructure buildout remains a durable theme," said Edward Jones senior analyst Brian Therien. "However, the negative share-price reaction may indicate that investors are becoming more focused on returns generated on AI-related investments."

Tesla’s profit came in well below Wall Street analysts’ estimates as the company increased spending. CEO Elon Musk said on Tesla’s earnings call that 2026 will be a "massive capex year" and that the company "should be spending on capex as fast as we can – spend as fast as we can without it being too wasteful."

Tesla’s spending is aimed at strengthening its AI capabilities and increasing production of Optimus humanoid robots, robotaxis and autonomous vehicles.

Ryan Lee, senior vice president of product and strategy at Direxion, said in a note that, "While Tesla continues to invest heavily in AI and robotics, monetization remains the central concern following the earnings miss."

"Tesla has become the physical AI story, with the potential to bring artificial intelligence into consumers' everyday lives through autonomous vehicles and robotics. The question is how quickly those investments can begin supporting the valuation," Lee added. Nvidia, as the leading supplier of AI accelerators to the same hyperscalers ramping spending, has seen its shares move in the opposite direction, reflecting its position as a primary beneficiary of the infrastructure buildout even as investors question returns for the companies writing the checks.