Investors Flee Magnificent 7 ETF, Rotate Into DRAM Plays
Outflows from the MAGS ETF are accelerating as US investors lose confidence in Big Tech and shift capital toward DRAM-linked assets.
US investors are pulling money out of the Magnificent Seven at a growing pace, with outflows from the MAGS ETF surging as sentiment toward the group's biggest names continues to erode, according to Benzinga. The shift marks a notable change in appetite from retail and institutional players who had piled into mega-cap technology throughout the previous bull run.
The rotation comes as most Magnificent 7 components — a cohort that includes the largest US technology companies by market capitalization — remain stuck well below their all-time highs. The persistent gap between peak valuations and current prices appears to be testing investor patience and prompting a search for fresher opportunities.
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DRAM-linked investments are emerging as one beneficiary of that repositioning, capturing flows that are leaving the Big Tech trade. Memory chip demand is closely tied to artificial intelligence infrastructure buildout, which may explain why some investors see DRAM as a more targeted way to play the AI theme without the elevated valuation risk associated with the Magnificent 7 basket.
The divergence between the two trades underscores a broader recalibration in US equity markets, where conviction in last cycle's leadership names is fading even as AI-related spending narratives remain intact. Analysts will be watching whether the outflow trend from MAGS accelerates further or stabilizes if any of the index's core holdings manage a decisive recovery toward prior highs.
Continue reading at Benzinga.
