A financial analyst recommends replacing Apple and Tesla in the Magnificent Seven index with Broadcom and Taiwan Semiconductor Manufacturing, arguing the new lineup would be more aligned with AI investment trends. Apple has limited AI offerings and relies on others' spending, while Tesla's profits fall far short of the other six members; by contrast, Broadcom designs custom AI chips and TSMC is the world's largest logic chip fabricator, making them more central to the AI landscape.
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A commentator argues the traditional Magnificent Seven tech stocks should be restructured by replacing Apple and Tesla with Broadcom and Taiwan Semiconductor Manufacturing (TSMC), positioning the group as purely AI-focused rather than general tech.
Why it matters
Apple's AI offerings have been limited and it relies on others' spending rather than investing its own; Tesla's profits lag far behind the other six companies in the group. Broadcom and TSMC are more central to the AI build-out—Broadcom designs custom AI chips and TSMC is the largest logic chip fabricator in the world—making them better representatives of where AI investment is concentrated.
What to watch
Taiwan Semiconductor is the sixth-largest company in the world and Broadcom is the eighth by market cap, both ranking above Tesla and Meta Platforms. An AI-centric Magnificent Seven would better track the progress of AI as a whole.
The Magnificent Seven emerged early in the artificial intelligence build-out, but the commentator contends the composition should reflect where AI investment and capability are actually concentrated. The current group includes three distinct segments: Nvidia as the sole computing unit maker; the AI hyperscalers (Alphabet, Microsoft, Amazon, Meta Platforms) that spend hundreds of billions on data centers; and Apple and Tesla, which the analyst views as peripheral to the core AI infrastructure race.
Replacing Apple and Tesla with chip-design and chip-fabrication specialists would create a more coherent story about AI's underlying technology stack. Taiwan Semiconductor ranks sixth globally by market cap and Broadcom ranks eighth, placing both above Tesla and Meta in size. The shift reflects a premise that an AI-first grouping should track companies whose success or failure directly determines the industry's technical progress, rather than those whose AI strategies remain secondary or unproven.
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