Tag Archives: TSLA

The “Magnificent Seven” Once Drove the Market; Now, They Are Diverging

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The “Magnificent Seven” tech stocks, which once propelled the U.S. stock market to consecutive record highs, are increasingly moving in different directions. As investors grow more cautious regarding the Artificial Intelligence spending boom, the performance of this mega-cap portfolio has shown significant disparity over the past year.

Data from The Wall Street Journal reveals that in 2025, only Alphabet (GOOG) and Nvidia (NVDA) outperformed the S&P 500. The remaining five giants—Microsoft (MSFT), Meta Platforms (META), Apple (AAPL), Amazon (AMZN), and Tesla (TSLA)—all lagged behind the broader market. Fund managers note that this group is no longer synonymous with market leadership. David Bahnsen, Chief Investment Officer at The Bahnsen Group, stated:

“The correlation between them has collapsed. Today, the only thing they have in common is the trillion-dollar market cap label.”

This shift marks a new phase in the AI trade logic since the start of this bull market, as investors become more selective. Some capital is rotating toward sectors like healthcare, expecting AI dividends to spread, while others are focusing on chipmakers or energy companies. This reflects a market transition from general AI themes toward specific sub-sectors and tangible profitability.

The AI Arms Race Intensifies Internal Divergence

The AI spending frenzy is creating a structural divide within the “Magnificent Seven.” Amazon, Alphabet, Microsoft, and Meta have explicitly pivoted to become “Hyperscalers,” investing hundreds of billions of dollars to train new AI models, build data centers, and expand cloud computing infrastructure. Meanwhile, Nvidia continues to dominate the high-end AI chip market, providing the core computational power for the most advanced AI models.

In contrast, other members are falling behind. Apple’s stock underperformed the S&P 500 last year, as the iPhone maker faced market criticism for its cautious AI investment and slower progress relative to competitors. Tesla, once the market’s primary focus, has seen its stock performance significantly trail most of its peers as growth in electric vehicle sales slows down.

Michael Arone, Chief Investment Strategist at State Street Global Advisors, pointed out:

“They are at different stages of development. Previously, the rising tide lifted all boats; now, we are going to see clear winners and losers.”

Individual Investors Shift Their Focus

Individual investors, who were long-time stalwarts of the “Magnificent Seven,” are gradually turning their attention to other market segments. According to data from Vanda Research, the proportion of retail trading in these seven stocks last year was significantly lower than the levels seen in 2023 and 2024.

Taking Tesla as an example—a long-time favorite among retail traders—the decline in trading activity is particularly stark. In 2025, the average daily retail trading volume for the stock dropped by approximately 43% compared to its peak two years prior. Despite this divergence, these seven companies still wield massive influence over the market. According to Dow Jones Market Data, they collectively account for about 36% of the S&P 500’s total market capitalization, meaning their movements will continue to dictate the performance of the broader market.

AI5 Chip Breakthrough: Tesla Announces Reboot of Dojo 3 Supercomputer Project to Secure Autonomous Driving Compute Independence

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Tesla CEO Elon Musk recently announced that with the design of the AI5 chip now complete, Tesla (TSLA) will reboot the development of its Dojo 3 supercomputer project. The Dojo project aims to provide massive computing power for autonomous driving systems and AI models through self-developed chips and systems, reducing reliance on external suppliers.

Analysts believe the AI5 chip will support more complex Full Self-Driving (FSD) algorithms. The progress of the chip’s mass production will directly influence the rollout speed of Tesla’s FSD features and could become a critical pillar for its robotics business.

Musk’s Announcement

On January 19, Musk posted on the social media platform X that Tesla will restart the development of the Dojo 3 supercomputer project following the completion of the AI5 chip design.

Simultaneously, he posted recruitment information seeking talent interested in “developing the world’s highest-volume chip,” requiring applicants to summarize key technical challenges they have solved in three bullet points.

In subsequent posts, Musk emphasized: “Solving the AI5 chip issue is critical for Tesla. Therefore, I had to have both teams focus on this chip’s development, and I have personally spent every Saturday on it for several months.”

Musk noted that AI5 will be an exceptionally powerful chip: a single SoC’s performance is roughly equivalent to Nvidia’s Hopper(NVDA) class, while a dual-chip configuration approaches Blackwell levels—but at a significantly lower cost and power consumption. “With AI5 progressing smoothly, we finally have some bandwidth to restart the R&D for Dojo 3,” he stated.

This marks a strategic reversal. In August 2025, reports suggested that Tesla had fully suspended the Dojo project, leading to the departure of project lead Peter Bannon. At the time, the move was interpreted as Tesla abandoning its self-developed autonomous driving chip plan.

Musk previously explained that it made little sense for Tesla to divide resources between two vastly different AI chip designs. He noted that Tesla’s AI5, AI6, and subsequent chips would excel in inference and perform well in training, and that all efforts would be concentrated there. He added that integrating multiple AI5/AI6 chips onto a single circuit board for supercomputer clusters could reduce networking complexity and costs by several orders of magnitude.

First mentioned in 2019, the Dojo project carries Tesla’s grand vision for AI. It is designed to optimize neural network models and process autonomous driving video data. Morgan Stanley previously estimated that a fully operational Dojo could potentially add billions of dollars to Tesla’s valuation.

A Decisive Battle for Autonomous Driving

Musk recently revealed that the AI5 chip for FSD is nearing design completion, while AI6 is in its early stages. Tesla aims to complete design cycles for AI7, AI8, and AI9 within a nine-month cadence.

According to previously disclosed data, the AI5 chip will deliver 2,000–2,500 TOPS of computing performance—roughly five times that of the current HW4 chip—enabling more sophisticated FSD algorithms.

Sampling and small-scale deployment of the AI5 chip are scheduled for 2026, with full mass production expected in 2027. As AI5 nears the finish line, Tesla has initiated early work on AI6, which is expected to launch in 2028. AI6 will likely continue Tesla’s foundry partnership with Samsung Electronics, utilizing a modular architecture deeply integrated with the Dojo supercomputer ecosystem to create synergy across vehicles, robots, and supercomputing.

Recent reports indicate that Samsung Electronics is accelerating preparations for AI5 production at its U.S. facilities, recruiting experienced engineers to stabilize yields and ensure a smooth manufacturing process for Tesla.

Shift to FSD Subscription Era

Alongside hardware updates, Tesla’s FSD strategy is undergoing a major shift. Musk recently announced that starting February 14, Tesla will discontinue the one-time purchase option for FSD in favor of a monthly subscription model.

This marks the end of a decade-long era of one-time buyouts (previously $8,000 in the U.S. and 64,000 RMB in China). Analysts point out that this “SaaS” (Software as a Service) approach aims to lower the barrier to entry, increase penetration, and generate recurring revenue.

Musk has hinted that the next version of FSD will achieve full autonomy, even admitting that Robotaxi driverless testing has already begun. Morgan Stanley views FSD 14.3 as a potential “Steam Engine Moment” for autonomous driving, which is shaping up to be a primary investment theme for Wall Street in 2026.

Musk Slams Apple-Google Partnership, Alleging “Unreasonable Concentration of Power”

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Elon Musk, the world’s wealthiest person, launched a scathing critique on Monday against the new partnership between Apple (AAPL) and Alphabet (GOOGL), claiming it grants the latter an “unreasonable concentration of power.”

Google and Apple announced a new multi-year cooperation agreement on Monday, though specific financial terms were not disclosed.

Under the agreement, Apple will utilize Google’s Gemini model to power a new version of Siri, set to launch later this year. This collaboration deepens the alliance between the two tech giants in the AI era and further solidifies Google’s position in its competition against OpenAI.

In a joint statement, the two companies said: “After a thorough evaluation, Apple determined that Google’s AI technology provides the most capable underlying support for Apple Foundation Models and is excited about the new innovative experiences this will unlock for Apple users.”

Musk responded on his social media platform X, stating: “Given that Google also controls Android and Chrome, this looks like an unreasonable concentration of power.”

Musk founded his own AI company, xAI, to compete with major industry players like OpenAI.

In contrast to Musk’s criticism, Dan Ives, an analyst at Wedbush Securities, believes the deal is a “positive win” for both Apple and Google. He noted that for Google, the partnership serves as a major validation of its status as a top-tier foundation model provider. For Apple, it represents a significant step in accelerating its AI strategy toward 2026 and beyond.

Apple had previously considered partnering with OpenAI or Anthropic to have ChatGPT or Claude power the new Siri but ultimately selected Google’s Gemini. Last November, Google launched its Gemini 3 model, which received widespread acclaim for its performance.

The latest agreement builds upon years of existing collaboration, as Google has long been the default search engine on Apple devices. This partnership not only drives massive traffic to Google but also generates tens of billions of dollars in annual revenue for Apple.

Apple currently has approximately 2.4 billion active iOS devices and 1.5 billion iPhones in use, representing one of the largest installed bases among consumer electronics companies.