The 2025 Magnificent 7 Shake-Up: Apple, Amazon & Alphabet Hit the Brakes

While the Magnificent 7 continues to dominate headlines and drive a substantial portion of the market's gains, 2025 has revealed growing divergence within the group. Apple (AAPL), Amazon (AMZN), and Alphabet (GOOGL) once consistent market leaders are among the underperformers this year.

All three stocks have traded roughly 10%–19% lower year-to-date, trailing behind stronger performers like Microsoft, Nvidia, and Meta. Despite these short-term setbacks, their long-term fundamentals and ongoing strategic shifts in AI, cloud, advertising, and services keep them central to many investor portfolios as they navigate regulatory pressures, macro uncertainty, and intensifying competition.

Here's a deep dive into where each of these companies stand today.

Apple (AAPL.NQ): Services Growth Meets Rising Regulatory Scrutiny

Apple continues to boast one of the strongest hardware-software ecosystems globally, but much of its long-term growth narrative now revolves around its high-margin Services segment.

In FY2024, Services revenue reached nearly $96 billion, accounting for about 25% of Apple’s total sales.

A major contributor remains the App Store commissions, generating over $10 billion annually, particularly from lucrative in-game purchases

However, Apple's longstanding commission structure now faces unprecedented legal and regulatory pressure.

Following its protracted legal battle with Epic Games, courts have forced Apple to open alternative payment options for in-app purchases, directly threatening a key cash cow.

As developers leverage these alternative payment channels, Apple’s net income could take a 2-4% hit over the next few years.

Meanwhile, broader antitrust and “anti-steering” investigations globally continue to challenge Apple’s platform control. Nonetheless, Apple remains resilient, leaning into AI (via Apple Intelligence), wearables, and health tech to fuel its next phase of ecosystem stickiness.

Amazon (AMZN.NQ): AWS + Advertising = The New Flywheel

Amazon’s story in 2025 is increasingly becoming a tale of two massive businesses: AWS and Advertising.

Amazon Web Services (AWS) remains the company's crown jewel, posting $117 billion in annualized revenue as of Q1 2025, growing at 17% YoY with 40% operating margins.

Many analysts argue that buying Amazon stock today essentially means buying AWS at ~$2 trillion valuation and getting e-commerce, Prime, logistics, and future businesses virtually free.

But AWS isn’t the only growth lever. Amazon’s advertising segment is scaling fast. reaching a $69 billion annual run-rate in 2024.

The company is now aggressively expanding into TV and sports advertising, seeking to tap into a $100B+ global ad opportunity.

Its exclusive NFL Thursday Night Football deal is already gaining momentum, attracting both advertisers and viewers, with recent games averaging 13.2 million viewers.

By merging rich first-party shopper data with its growing content platform (Prime Video), Amazon is positioning itself to become a dominant force in performance-based TV and streaming ads, a space where Google and Meta traditionally held an advantage.

Alphabet (GOOGL.NQ): Ad Dominance Balanced Against AI Disruption

Alphabet remains a global leader in digital advertising, but 2025 is shaping into a complex balancing act between defending its core search and YouTube ad business while aggressively pushing deeper into AI and cloud computing.

Roughly 68% of Alphabet’s valuation still comes from advertising, with Google Search remaining one of the most profitable ad businesses globally.

Despite mounting competition from AI-native players like OpenAI and Microsoft, Alphabet continues to post solid ad growth, with search advertising CAGR still exceeding Microsoft's by several points.

Google Cloud remains a fast-growing but smaller contributor, expanding partnerships in AI infrastructure while improving profitability.

Meanwhile, its autonomous driving arm Waymo represents one of Alphabet’s most underappreciated long-term growth assets, as self-driving deployment inches forward.

On the risk side, Alphabet faces both antitrust challenges and AI competitive threats, as generative AI reshapes how consumers interact with search and content discovery.

Nonetheless, Alphabet's multi-pronged monetization model remains highly cash generative.

Comparing Their 2025 Strategic Focus

Final Thoughts: 3 Titans, 3 Very Different Paths

While all three remain deeply entrenched in their leadership positions, 2025 highlights how differently these companies are evolving.

• Apple faces margin pressure on its most profitable Services revenue source, but leans into AI-powered devices and wearables.

• Amazon leverages AWS' cloud dominance while rapidly building a high-margin advertising empire across Prime Video and live sports.

• Alphabet remains the global ad king but now faces an AI inflection point that may reshape its core search business in ways not seen since its inception.

The Magnificent 7 may all sit under one label, but for investors, each offers a very distinct growth and risk profile in today's fast-changing market.

Hope you have found the above stocks useful 😃 

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Sources:
1.Bloomberg: Apple Faces Growing Pressure From Epic Games Ruling on App Store Payments
2. CNBC: AWS Surpasses $117 Billion Run Rate, Amazon Ads Approaches $69 Billion
3. Wallstreet Journal: Google Cloud Gains Ground as AI Competition Escalates

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