CNBC’s Jim Cramer said Thursday that investors are making a mistake by lumping all the Magnificent Seven tech giants together as if they were a single commodity, when in fact each company has vastly different businesses and AI strategies. The “Mad Money” host, whose Charitable Trust portfolio owns six of the seven mega-cap stocks, argued that comparing them unfairly masks their distinct competitive positions.
The Magnificent Seven—Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia, and Tesla—have largely struggled in 2026 after powering the market higher in the prior years of the generative AI boom. Since mid-May, the group is down more than 13%, according to Yahoo Finance reporting from June 29.
Cramer pointed to Meta as a prime example of how the market misunderstands the group’s diversity. Meta plans to begin manufacturing its own AI chip, called Iris, in September 2026, according to Reuters reporting cited by CNBC. The market’s initial negative reaction to the news stemmed from the signal that Meta’s capital expenditures will not slow anytime soon. The company expects to spend between $125 billion and $145 billion on AI infrastructure this year, a massive portion of Big Tech’s more than $700 billion in combined AI spending.
Yet Cramer argued that investors should recognize Meta CEO Mark Zuckerberg’s track record of understanding his company’s prospects better than Wall Street does. “Maybe we should lean in and recognize that he knows more about his company’s prospects than we do,” Cramer said. “He’s demonstrated that time and again.”
Cramer made a similar case for Alphabet, saying investors are too focused on its massive AI spending and competition from ChatGPT and other chatbots while overlooking the value of businesses such as YouTube and Waymo. He acknowledged that the megacap technology stocks will likely continue trading together, with weakness in one often dragging down the rest. But he said that same dynamic could eventually work in their favor once one company proves AI can become a meaningful profit driver. “We get one, just one, of these heavy hitters saying its AI business is now profitable, then you can forget about owning a commodity semiconductor stock,” Cramer said. “Instead, you’ll go for the hyperscaler that’s spewing so much cash flow it won’t even know what to do with the money.”
The Mag 7’s combined value shrank by $2.3 trillion in late June amid investor jitters over when these massive AI bets will produce returns, according to CNBC reporting from June 30. Cramer urged investors to ride out the underperformance, saying “One day, one of these companies is going to announce on its conference call that it is raising forecast because of its AI products, and you are going to see a rally in all of them, a rally that will be so powerful that you kick yourself for missing out on it.”
Sources
- CNBC — Jim Cramer’s statement on Magnificent Seven stocks on July 9, 2026, his argument against lumping them together, Meta’s AI chip plans, and the market’s reaction to capex signals
- Reuters — Meta’s plan to put AI chip into production in September 2026
- Yahoo Finance — Magnificent Seven stocks down more than 13% since mid-May 2026
- CNBC — Mag 7 value shrinks by $2.3 trillion amid AI spending jitters (June 30, 2026)
