Gather round while we look at the reality of markets. They correct, and sometimes, corrections are brutal. Feb. 5 proved to be a really brutal day, especially for the Magnificent 7 stocks.

The Mag 7 group, which includes Apple, Alphabet, Amazon, Meta Platforms, Microsoft, Nvidia, and Tesla, has mostly struggled so far this year.

That’s because investors worry that the group is spending billions on data labs that may take years to become profitable.

And there’s no sign the contagion is easing.

Among the seven Magnificent Seven stocks, five are showing losses of 10% or more from their recent 52-week highs:

  • Amazon.com, down 13.9% on the Feb. 5 close from Nov. 3, 2025’s peak.
  • Facebook parent Meta Platforms, down 15.8% since peaking on Aug. 15, 2025.
  • Microsoft, down 29.1% from July 31, 2025 peak.
  • Nvidia, down 19% from its Oct. 29, 2025 top.
  • Tesla, down 20.4% the Dec. 22, 2025 peak.

Apple, a member of the Dow Jones 30, and Google-parent Alphabet are also down, but not as much as the others: 4.4% for Apple and 5.1% for Alphabet from highs reached on Dec. 3, 2025, and Feb. 3, 2026, respectively.

But Amazon shares fell 9.6% after reporting earnings and estimated it will spend $200 billion on artificial intelligence investments this year alone.

The stocks that emerged in 2025 as near-Mag 7 stocks were also, well, creamed:

  • Broadcom, down 23.65% from Sept. 10, 2025.
  • Palantir, down 36.6% from Nov. 3, 2025.
  • Oracle, down 60.5% from Sept. 10, 2025.

The AI hangover from 2025

The losses for many stocks now come after big gains in 2025. And the market as a whole is feeling the stress.

  • The Standard & Poor’s 500 Index is now off 1.53% in February and down 0.7% so far in 2026.
  • The Nasdaq Composite Index, down 3% for the year, has seen a 3.7% slide so far in February and is looking at a 3% loss this year.
  • The Dow Jones Industrial Average, despite a Feb. 5 loss of nearly 593 points, is up 1.76% this year and even up 0.8% so far for the month.

The S&P 500 is down 2.9% from its 52-week high last fall. The Nasdaq-100 Index is down 6.2%, but the recent selling is proving stubborn.

For big tech companies, the tension is growing between companies and investors as they try to balance the investment levels needed to deliver on artificial investment goals and shareholders’ interest in gains.

Big tech, which saw shares jump last year, are giving a lot back. Oracle was up 107.5% in 2025 and is down 30% this year. Nvidia, up 40% in 2025, is down 7.8% in 2026.

“People are definitely going more defensive,” said Brian Frank, president and portfolio manager at Frank Funds, told Bloomberg. “It’s more of like a shoot first and ask questions later type environment.”

Tech and crypto waiting for a bottom

In fairness, we have to note that stresses on the stock market are not uniform. They’re concentrated on technology and anything connected to crypto.

Bitcoin is a mess. It fell 13.3% to $63,597 just on Feb. 5. The close was its lowest level since October 2024.

At the close, Bitcoin was down 27.4% this year, 18.4% after five days of trading in February and nearly 50% since its 52-week high in October.

More Nvidia:

  • Nvidia stock gets major reality check on ‘$100B’ number
  • Veteran analyst delivers surprise verdict on Tesla, Nvidia
  • NVDA, PLTR, small cap stock bets reset after U-turn

Bitcoin is  — and always has been  — a boom and bust phenomenon. When booming, it sucks in dollars loudly. A slump, however, will push dollars out just as quickly, especially dollars that came in through exchange-traded funds.

But the holdings are often hard to understand, and selloffs can cause big problems.

Here, we suggest you watch what happens to the crypto company Strategy (formerly MicroStrategy).

After the Feb. 5 close, Strategy announced a loss of $42.9 a share, or $12.6 billion, in the fourth quarter. It owns 713,602 bitcoin, but their current value of $46 billion is at least 40% less than what the company paid for them. With bitcoin under $64,000, investor Michael Burry suggested to Barrons, the company may have trouble financing its business.

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Not everyone was hit

A total of 183 S&P 500 stocks were higher on Feb. 5. So, the end of markets as we know them aren’t in play yet. The SP 500’s leader on the day was pharmaceutical distributor McKesson, up 16.5%. Another leader: Hershey, up 9%.

The biggest losers in the index included Estee Lauder, down 19.2%; Coinbase Global, down 13.3%; and Cummins, the engine maker, down 10.7%.

Related: Deutsche bank reaffirms gold price target into late 2026

Consumer staples stocks were the day’s strongest group. These include Hershey, Mondelez International, Coca-Cola and Costco Wholesale. Tech was decidedly the laggard.

Walmart joined the small club of companies with market capitalizations above $1 trillion just this week. The shares, however, dipped slightly on Feb. 5 and, at $127.55, are up 14.5% this year, including 8.1% in February.

How long can this tumble last?

Wall Street, always an optimistic tribe, will argue, correctly, a correction happens regularly at least once a year. (There have been 37 declines of 10% or more since 1945.)

So, if the pullback gets that big, it would be the year’s first. 2025 saw just one, in April, in the wake of President Trump’s tariff proposal.

Futures trading late Feb. 5 suggests another slump on Feb.6. However, the overnight markets have been less accurate lately in signaling how the U.S. market will open.

Since before the Great Recession in 2008-2009, I have watched the relative strength levels of stocks, which offers a view of a stock’s strength. They’re helpful in judging indexes, interest rates and commodity prices.

  • Rule of thumb: An RSI level above 70 suggests a stock is overbought; in the eighties or higher, look for a selloff. Below 30 suggests oversold.

In this case, I looked at the RSI for Microsoft. It was at 24.54 at Thursday’s close, according to Wall Street Journal data. (It had reached nearly 80 in the spring of 2025.)

The company is very profitable. It has a higher bond rating than the U.S. government, throws off lots of cash, and has manageable debt. And it has a wide competitive moat.

Thursday’s reading suggests Microsoft shares are seriously oversold. Sooner or later (probably sooner), a rebound will erupt in Microsoft and many others.

Unless something really bad happens.

Related: Why jobs data, big tech sent stock market reeling