The Magnificent 7 tech magacaps fueled the AI-powered bull market, but lately Warren Buffett’s old-economy conglomerate Berkshire Hathaway is coming out on top. The CNBC Magnificent 7 Index, consisting of Apple , Alphabet , Nvidia , Microsoft , Tesla , Meta and Amazon , is up 43.4% since the beginning of 2024. Berkshire has handily beaten the tech group by three percentage points, climbing 46.3% gain during the same period. “Believe it or not, you would have been better off buying BRK/B than the Mag 7 to start ’24,” Chris Verrone, Strategas head of technical and macro research, said in a note to clients, referring to Berkshire’s Class B stock. That’s largely due to Mag 7’s dramatic pullback in the new year, falling 13%. Technology stocks have come under pressure as economic uncertainty surged in the first two months of the Trump administration, driven by the impact of higher tariffs and concern about soaring investment in artificial intelligence. All seven stocks are lower in 2025. Berkshire, meanwhile, has rallied more than 15% in 2025, hitting several record highs along the way. The underperformance of the Mag 7 indicates a shift in market leadership, at least for now, as the questionable macroeconomic environment dents risk appetite, driving investors to safer corners of the market. Berkshire fits the bill given the the defensive nature of its huge Geico insurance empire and its unmatched balance sheet boasting hundreds of billions in cash. Tesla is the biggest loser in the Mag 7, tumbling nearly 50% just since its record high in December. Even Microsoft, the outperformer in the group, is down 13% from its recent peak. Apple, in which Berkshire still owns a large position, has sold off 14% this year. Coincidentally, the 94-year-old investment legend has slashed his Apple stake by two thirds over the past year, last reporting owning 300 million shares at the end of 2024. That’s spared Berkshire billions of dollars in investment losses. “The Magnificent 7 stocks are down more than twice as much as the rest of the S & P 500, highlighting the risks of chasing recent winners” said Jason Pride, chief of investment strategy and research at Glenmede. Fundamentally, the Omaha-based conglomerate is reporting stellar profits. Berkshire’s operating profit, or earnings from the company’s wholly-owned businesses, jumped 71% to $14.5 billion in the fourth quarter. Profits from insurance underwriting alone soared 302% from the year-earlier period, to $3.4 billion.
