Magnificent 7 stocks have entered correction territory as geopolitical instability in Iran and cooling investor enthusiasm for artificial intelligence spending trigger a broad selloff across Big Tech.

Key points

• All seven companies are down at least 10% from 52-week highs, with Microsoft shares falling 32% from their October peak.
• Combined capital expenditures for Google, Microsoft, Amazon, and Meta are projected to reach $650 billion in 2026, a 60% increase over 2025.
• Rising oil prices following the start of Operation Epic Fury on Feb. 28 have shifted market expectations from potential interest rate cuts to possible rate hikes.
• Institutional investors are rotating capital out of technology stocks and into energy, industrials, and domestic manufacturing sectors.
• The Strait of Hormuz remains under Iranian control, threatening 20% of global oil supply and creating uncertainty that complicates traditional stock valuation models.

Why it matters: The simultaneous decline of these market leaders signals a significant shift in investor sentiment as the AI-fueled growth narrative faces pressure from inflation and geopolitical conflict. This rotation away from Big Tech could reshape broader market performance and force a reevaluation of growth-stock valuations in an increasingly volatile global economy.