Mag 7 Stocks Rally On AI Capex Surge; NVDA, MSFT, GOOGL Hit New Records

The artificial intelligence trade is showing no signs of retreat, with the Mag 7 tech giants driving index records. NVDA shares surged 20% over the past week and now command a valuation approaching $6 trillion as investors bet heavily on AI capex spending. The chipmaker's momentumThe empirical fact that winners keep winning over the medium term. was reinforced by signals from peers; Cisco reported strong AI-driven demand for networking infrastructure, suggesting the buildout is widening beyond GPUs into switches, optics, and scale-across systems.

CEOs of MSFT, META, GOOGL, AMZN, and AAPL each flagged constrained memory as a persistent bottleneck during recent earnings calls, yet markets continue to price slow-moving memory suppliers like MU at only 7x earnings despite structural supply tightness. This disconnect signals traders expect capex cycles to accelerate even further, with both hyperscalers and enterprise customers racing to deploy inference capacity alongside training infrastructure.

Broad institutional participation is evident in call option flows; bullish single-leg call premium totaling over $249 million was purchased across the Mag 7 on a single day, with NVDA, TSLA, and AAPL accounting for nearly half of all call volume. Retail flows tell a similar story: equity indices including SPY and QQQ are pushing to fresh all-time highs on easing trade tensions and strong retail sales data, with breadth remaining constructive despite valuation extremes in the top 10 names.

Skeptics warn that the AI capex cycle may be front-loaded, with some traders questioning whether memory constraints and slowing earnings growth will eventually force multiple compression even if absolute revenues climb. The key debate centers on timing: is this the beginning of a multi-year deployment phase, or are we already pricing in most of the upside?