“In terms of low-risk, growth-focused investment opportunities, there have been no better options for investors than Wall Street’s imperious ‘magnificent seven’ stocks.”, — write: www.fxempire.com
The judge found that Google violated section 2 of the Sherman Act, with accusations that its services and advertising kept users locked into the company in a way that prevented the emergence of competitors.
The fallout from the trial saw GOOGL fall 11.6% from its July 2024 peak by the end of November, with fresh uncertainty over what the future holds for its tech empire at a time of accelerating innovations.
In November, the US Department of Justice suggested that Google divest its Chrome internet browser as a remedy in the wake of the case.
The DOJ also ruled that Google should be prevented from entering into exclusionary agreements with third parties like Apple and Samsung in a move that could open the door for more competitors to capture market share in the future.
Crucially, the department suggested that Google be prohibited from giving preference to its search service within its other products.
AI Could Destabilize Tech Leaders These antitrust investigations are taking place against the backdrop of a tech boom powered by artificial intelligence.
OpenAI recently launched ChatGPT Search in a move that saw Google quickly begin testing its own real-time conversational search function.
With data suggesting that as much as 20% of searches in 2023 occurred without the use of a keyboard, voice search powered by AI could be a key battleground for dominance among the world’s biggest tech firms.
Fresh scrutiny over the market monopolies that leading tech companies are building could open the door for fresh competitors to destabilize Wall Street’s status quo among the Magnificent Seven.
Should Investors be Wary of the Magnificent Seven? Renewed scrutiny over the market dominance of Magnificent Seven firms comes at a time when markets haven’t been so concentrated at the top since 1960. Today, the Magnificent Seven account for 30% of the S&P Index in terms of capitalization, which may be challenged as new innovations, especially when it comes to transactions transparency, bring fresh opportunities.
With a trade war between the US and China beginning to accelerate, and greater industry scrutiny of tech giants like Google, the Magnificent Seven could see some new challenges emerge in 2025 even as the Trump administration is expected to support a pro-growth outlook for Wall Street.
The brightest global tech stocks have proven themselves time and again, and it’s reasonable to expect that their growth will continue for the foreseeable future, but the impressive 120% rally of Roundhill’s Magnificent Seven ETF over the past 18 months may be considerably harder to replicate looking ahead.