Chip Stocks vs. the Magnificent Seven: Market Share

Chip stocks make up 13.9% of the S&P 500 and are outpacing the Magnificent Seven this year.

By Lyle Daly – Updated Jul 22, 2026 at 5:13 PM EST | Fact-checked by Frank Bass

Key Points

Chip stocks compose 14% of the S&P 500, showcasing significant market presence.
In 2026, chip stocks outperformed the Magnificent Seven and S&P 500 in returns.
Chip designers hold the highest market cap, driven largely by Nvidia's performance.

Chip companies have been among the biggest beneficiaries of the AI buildout, and they now make up a rapidly growing portion of the S&P 500. Over the last year, the largest chip stocks have also grown much faster than the Magnificent Seven, a group of seven of the most influential tech-related stocks.

The data below compares a basket of different types of chip stocks to the Magnificent Seven and the S&P 500 index in terms of size and recent performance. For investors, this information shows where value is concentrated in the market and the main areas of growth right now.

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Chip stocks account for 14% of the S&P 500

Among the chip stocks in this basket, the 12 in the S&P 500 had a combined market cap of $9.57 trillion in July 2026, accounting for 13.9% of the index. The full basket includes 16 chip companies, four of which are foreign private issuers (and not S&P 500-eligible), and has a total combined market cap of $12.62 trillion. That would account for 18.3% of the S&P 500 if all the chip stocks in the group were eligible for the index.

The Magnificent Seven have a combined market cap of $22.69 trillion, making up 32.9% of the S&P 500. Despite the recent performance of chip stocks, the Magnificent Seven remains the significantly larger group overall.

These two groups aren't mutually exclusive, as they share one company: Nvidia (NVDA -1.52%), one of the leading AI stocks. It's a chip designer and a member of the Magnificent Seven, and it has been a standout performer in both groups over the last five years.

Nvidia is the largest chip stock by a wide margin, with a market cap of $4.91 trillion as of July 2026. After Nvidia, the chip stocks worth the most are Taiwan Semiconductor Manufacturing (TSM -0.51%), also known as TSMC, and Broadcom (AVGO -0.35%).

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Chip stocks are outpacing the Magnificent Seven and the S&P 500 in 2026

Chip stocks have collectively delivered outstanding year-to-date (YTD) and trailing one-year returns, and they're well ahead of the Magnificent Seven and the S&P 500 in both areas. Here are market-cap-weighted returns for all three groups. Keep in mind that Nvidia belongs to the chip basket and the Magnificent Seven, so it contributes to the returns of both groups:

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Data source: Stock returns through July 17, 2026; S&P 500 return from Slickcharts through July 16, 2026.
Group	YTD Return	1-Year Return
Chip basket	64%	145%
Magnificent Seven	6%	32%
S&P 500	11%	21%

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Although chip stocks have performed well overall, there's considerable variation in performance among them. This year, Micron Technology (MU -3.19%) and SK Hynix (SKHY -3.02%), two of the largest memory chip companies, have grown the most. Their share prices had increased by 216.8% and 182.9%, respectively, through July 17.

Only one of the chip stocks in this analysis had a negative YTD return: Skyworks Solutions (SWKS -0.22%), which has declined 4.5%. That continues a downward trend, as it has lost 63.4% over the last five years, making it one of the worst-performing semiconductor companies.

Performance also varies widely among the Magnificent Seven, even though they're grouped. Apple (AAPL +2.84%) was the top performer on the year with growth of 23.0% as of mid-2026. Longtime rival Microsoft (MSFT -1.19%) lagged the rest of the group, with YTD losses of 18.2%.

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Chip designers' market cap amounts to $8.01 trillion, the most of any category of chip company

There are three categories of chip companies: designers, foundries, and integrated. Here's what each one does:

Designers are companies that design chips but outsource the manufacturing to a foundry. GPU stocks, including Nvidia, Broadcom, and Arm Holdings (ARM -3.13%), are in this category.
Foundries are companies that manufacture chips designed by other companies. TSMC is the world's largest foundry.
Integrated companies handle both chip design and manufacturing. Examples include Intel (INTC -1.36%) and Micron.

Designers account for the largest portion of the chip basket's total value, with a combined market cap of $8.01 trillion. Foundries combine for $1.86 trillion, although there are only two in the group, TSMC and GlobalFoundries (GFS -1.90%). Integrated companies have a combined market cap of $2.75 trillion.

The main reason designers hold far more value is their asset-light business model and higher profit margins. They don't face the substantial costs of building and operating semiconductor fabrication plants (fabs). However, it's worth noting that Nvidia is doing much of the heavy lifting among designers, with its market cap of $4.91 trillion.

Although there are multiple foundries and integrated companies with fabs, TSMC is the clear leader in chip manufacturing. It has the largest market share and dominates the list of semiconductor manufacturers by revenue.

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*Not an S&P 500 constituent. Percentage shown for scale comparison only, not actual index weight.
Company	Category	Market Cap	% of S&P 500
Nvidia	Designer	$4.91T	7.12%
Broadcom	Designer	$1.76T	2.55%
AMD	Designer	$808.39B	1.17%
Qualcomm	Designer	$181.06B	0%
ARM Holdings	Designer	$284.29B	0.41%*
Monolithic Power Systems	Designer	$64.46B	0%
Designer total		$8.01T	11.61%
TSMC	Foundry	$1.83T	2.65%*
GlobalFoundries	Foundry	$31.54B	0.05%*
Foundry total		$1.86T	2.70%
Intel	Integrated	$477.67B	0.69%
Texas Instruments	Integrated	$258.48B	0.37%
Micron	Integrated	$958.80B	1.39%
SK Hynix	Integrated	$901.36B	1.31%*
ON Semiconductor	Integrated	$34.00B	0.05%
Microchip Technology	Integrated	$43.96B	0.06%
Skyworks Solutions	Integrated	$8.93B	0.01%
NXP Semiconductors	Integrated	$67.29B	0.10%
Integrated total		$2.75T	3.99%

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What the growth of the top chip stocks means for investors

A small group of stocks is sometimes responsible for a significant portion of the stock market's gains over time. The Magnificent Seven generated much of the market's total gains for part of 2023 and 2024, and, due to their success, those seven stocks grew to account for an ever larger share of the S&P 500.

Now, a similar trend is emerging among the best semiconductor stocks, and they've rewarded long-term investors. The full basket of 16 chip stocks has collectively delivered five-year returns of 783.7%, compared to 299.2% for the Magnificent Seven and 74.2% for the S&P 500. To reiterate, Nvidia is a chip stock and a member of the Magnificent Seven, so its returns count toward both groups.

The tradeoff with smaller groups of stocks is that they carry much greater volatility, and that's amplified when they're tech stocks, since that's already a volatile market sector. Both chip stocks and the Magnificent Seven tend to deliver higher highs and lower lows than the market as a whole. While volatility and risk come with the territory, diversification can still help. Semiconductor ETFs provide a more diversified alternative than picking individual stocks, which is one way for investors to capture the upside of chip stocks with reduced risk.

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About the Author

Lyle Daly is a contributing Motley Fool stock market analyst covering information technology and cryptocurrency. Lyle has been a contributor at the financial services company since 2018. His work has been featured on USA Today, Yahoo Finance, MSN, Fox Business, and Nasdaq. Before joining The Motley Fool, he wrote for financial brands including Intuit.

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