Magnificent Seven Split: Google on Track for Biggest AI Gain According to Plexo Capital Analysis

The Magnificent Seven – those seven tech giants long regarded as a unified bet on innovation – are fracturing. Lo Toney, founding partner at Plexo Capital, explained on September 8, 2026 on CNBC's "Squawk Box" that artificial intelligence is not lifting the group together, but rather splitting it into winners and laggards. His analysis directly contradicts CNBC host Jim Cramer, who had called on investors to buy the entire group days earlier.

Two Factors Dividing the Magnificent Seven

Toney identifies two central factors determining success or failure: control over AI infrastructure and the ability to turn it into profit. From this logic, he derives four distinct categories into which the seven companies divide.

The Hyperscalers – Google (Alphabet), Microsoft, and Amazon – are building massive AI data centers. Despite this infrastructure, they must still prove that their substantial AI factory spending actually translates into profit. As of September 9, 2026, all three hyperscalers are lagging the S&P 500 year-to-date, according to current market data. This underperformance challenges the assumption that investment spending directly leads to stock gains.

The Aggregators Meta and Apple do not need AI as a standalone business field. They deploy the technology to strengthen their existing advertising and hardware franchises. Tesla Toney classifies as a specialist that translates AI into physical products and services – a path with its own regulatory and profitability questions.

Nvidia holds a special position: the company profits while its customers must prove the economics of AI themselves. Toney highlights this advantageous position, which now extends to software. On September 3, 2026, Nvidia agreed to acquire Hugging Face, an open-source AI platform, for approximately $12.9 billion. Nvidia's upcoming quarterly results are seen as the clearest test of whether the industry's spending broadly pays off.

Google as Preferred Choice Among the Seven

Based on his analytical framework, Toney named Alphabet (Google) as the preferred choice among the Magnificent Seven. The company combines several advantages: it operates its own data centers, produces specialized chips, and monetizes AI through multiple channels simultaneously – Search, YouTube, Cloud Services, and the self-driving unit Waymo.

In the past twelve months through September 9, 2026, Google shares gained approximately 42 percent. In the current year 2026, however, they rose only 5 percent. The Wall Street consensus implies another roughly 25 percent upside potential. Toney pointed out that this gap between current performance and expected potential is larger at Google than at most competitors – particularly compared to those stocks Jim Cramer recently favored.

Contradiction to Cramer's Buy Call

Cramer's position, which he presented days before Toney's appearance, was: the Magnificent Seven are cheaply valued, years of AI spending would finally pay off, and monetization is imminent in 2027. He called on investors to say "buy buy buy" because the market unfairly undervalues these names ahead of the profitability breakthrough.

Toney's argument fundamentally contradicts this blanket assessment. While Cramer treats all seven stocks as a single investment package, Toney emphasizes the differences: some group members are already cashing in returns, while others still owe investors proof that their spending generates profit.

Market Performance Underscores the Split

Stock performance in 2026 confirms Toney's thesis of a split. The three hyperscalers, which are investing heavily in AI infrastructure, remain behind the S&P 500 despite their spending. This underperformance continues a trend that began in 2025: back then, the Magnificent Seven lagged broader technology indices and global stocks after dominating performance in 2024.

On December 15, 2025, analysts noted it was "certainly possible that all Magnificent Seven stocks could live or die in 2026 depending on how investor sentiment toward AI develops." By May 2026, strong quarterly results from Big Tech companies gave investors "plenty of reasons to stay invested in the AI trade," as Reuters reported, and helped support stocks despite oil market turbulence.

Broadening Beyond the Magnificent Seven

Analysis from May 2026 suggests that the Magnificent Seven trade itself is "breaking apart" as AI investment spending, index concentration, and structural alpha reshape where investors should seek returns. In April 2026, observers noted that earnings growth is broadening beyond mega-cap tech, while AI adoption is expanding into sectors like infrastructure, healthcare, and gaming. Differing adoption rates could create winners and losers in these broader sectors.

Core Question: Proof of Profitability

The central tension in September 2026 revolves around whether spending on AI infrastructure actually translates into profit. Some Magnificent Seven members still owe investors this proof, while others – by Toney's assessment – are already collecting returns. This distinction, not the blanket treatment of all seven stocks, forms the critical investment consideration.

On September 9, 2026, the S&P 500 closed at 7,643.88 points, down 0.33 percent. The DAX fell 1.22 percent to 25,551 points. The hyperscalers' performance, which lags this broad index, underscores the challenge: infrastructure alone guarantees no return – what matters is the ability to develop revenue-generating business models from that infrastructure.