The high-tech giants known as Magnificent Seven have enjoyed massive returns over the past few years, but have seen stocks ride on a roller coaster over the last few months. What are the outlook for these mega-sized stocks? At the 2025 Morningstar Investment Conference, three top growth fund managers sat down with Tony Thomas, Associate Director of Equity Strategy for Morningstar Research Services, to discuss their thoughts on these companies.
The panel features Dan Davidwitz, portfolio manager of Polene Capital’s Pole Growth Strategy, Loomis Sayles Sayles’s Portfolio Manager of Loomis Sayles’s Growth Strategy, and Chris Lynn, portfolio manager of Fidelity Otto Folity Strategy’s Fidelity OTC Strategy. This is what they had to say about the epic Seven.
Alphabet: Regulation Threat
Pollen Growth Weight: 3.8% Weight Growth of Loomis: 5.5% Weight of Fidelity OTC: 9.3% Weight of Russell: 1000: 6.1%
Both Davidowitz and Lin consider it a major risk of alphabet’s regulation of business after US District Judge Leonie Brinkema Domination The company has an illegal monopoly in the sell-side advertising market. “The FTC’s ruling with Google certainly makes a huge hole in their services business.
Lynn added that of all the grand seven stocks, the alphabet believes it faces the biggest risks of regulation.
Alphabet has a 4-star Morningstar rating and a large economic moat.
Amazon: Consistent small risks paid off greatly
Pollen Growth Weight: 11.1% Weight of Loomis Sayles Growth: 5.5% Weight of Fidelity OTC: 6.6% Weight of Russell 1000: 6.5%
Hamzaogullari loves Amazon’s track record of taking consistent small risks that have been rewarded over time. “When AWS first started, for example, there were very few question marks,” he said. “At present, more than half of the company’s profits come from AWS,” he also said similar stories came from the company’s efforts to ship and advertising. “I remember what Jeff Bezos said. If you get to that point, it wouldn’t be good for you as a company.”
Amazon has a 4-star Morningstar rating and a wide range of economic moats.
Apple: Are consumers happy to see past AI features?
Pollen Growth Weight: 2.1% Weight of Loomis Growth: 0.0% Weight of Fidelity OTC: Russell Weight 14.2%: 9.8%
Davidowitz, which recently sold Apple, said its growth papers have been declining recently. In addition to the regulatory and tariff threats, he points out the launch of Apple Intelligence. “When I saw Apple Intelligence at the Worldwide Developer Conference, I thought it would catalyze a very large upgrade cycle for the iPhone,” he said. “It quickly became clear that there is a problem with Apple Intelligence: it is very “application-free.” The app isn’t a demo, and there’s nothing in a year. ”
Lynn, who has Apple’s funding, believes that consumers are willing to overlook this because of the company’s strong brand and ecosystem. He asked the audience to raise their hands to decide whether they would continue to buy using their iPhones, even if their AI assistants were of lower quality than their competitors. More than half of the audience did that.
Apple has a 3-star Morningstar rating and a wide range of economic moats.
Metaplatform: Does Metaverse provide return on investment?
Pollen Growth Weight: 0.0% Weight of Loomis: 7.2% Weight of Fidelity OTC: 3.9% Weight of Russell: 1000: 4.5%
Davidowitz said Meta has seven of the worst capital allocations all spectacular. Specifically, he doesn’t think their investment in major open source language models will pay off. “When they originally started investing in metaverse, we were very depressed that we were spending $14 billion a year.
Meta has a 3-star Morningstar rating and a wide range of economic moats.
Microsoft: AI is already driving revenue
Pollen Growth Weight: 7.1% of Loomis Sayles Growth: 4.4% of Fidelity OTC: 10.5% of Russell: 11.3%
Unlike most software companies, Microsoft has already quantified the massive revenues ($10 billion a year) from generated AI, Davidowitz noted. “No one is close to that,” he said. “The ServiceNow we own runs at a running rate of around $250 million to $300 million. So the gap is huge between Microsoft and everyone else.” He said Copilot, the company’s AI assistant, is tied to a suite of software already built into businesses around the world.
Microsoft’s Morningstar rating has a 3-star moat for a wide range of business circles.
Nvidia: Periodic Business Creates Risk
Pollen Growth Weight: 0.0% Weight of Loomis Sayles Growth: 8.0% Weight of Fidelity OTC: 10.0% Weight of Russell 1000: 10.6%
Davidowitz explained that he does not own Nvidia due to the risk of its shortcomings. “We want annual revenue and revenue growth in a durable and consistent year,” he said. “Nvidia certainly has it, but there are times when we reach the drawbacks of every semiconductor company’s cycle. And we have previously owned Nvidia through downcycles, which is particularly vicious. Nvidia’s business model has no recurring revenue.”
Nvidia has a 3-star Morningstar rating and a wide range of economic moats.
Tesla: Software Platform or Auto Maker?
Pollen Growth Weight: 0.0% Weight of Loomis Sayles Growth: 6.5% Weight of Fidelity OTC: 0.1% Weight of Russell 1000: 3.3%
Hamzaogullari, the only manager of the panel that has a considerable weight at Tesla, said he likes the innovation and capabilities of the company that disrupts a variety of industries, including car manufacturing and distribution. In manufacturing, he pointed out the company’s 100% vertically integrated manufacturing process. This is different from the processes of other major brands such as General Motors and Toyota. In the distribution space, he pointed to a Tesla dealer-free model for selling cars.
Lynn added that the company’s growth potential lies in its ability to expand its business beyond car manufacturing. “I think Tesla is conceptually very simple,” he said. “Does Elon Musk believe it? If he believes it is more than a car company, then you should probably buy it as a platform and a tech company that means cars are the first act. If you don’t, you shouldn’t.”
Tesla has a 2-star Morningstar rating and a narrow economic moat.
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