Why Retail Traders Are Over the Mag Seven

Summary

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WSJ What’s News – "Why Retail Traders Are Over the Mag Seven"

Date: July 20, 2026
Host: Alex Osolleff (B)
Featured Guests:

• Hannah Aaron Lang, WSJ Markets Reporter (C)
• Michael Gordon, WSJ National Security Correspondent (D)
• Owen Tucker Smith, WSJ Reporter (A)

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Episode Overview

This episode examines why retail investors are stepping away from the "Magnificent Seven" mega-cap tech stocks, gravitating instead toward emerging AI opportunities and lesser-known tech players. It also covers breaking legal news about the Paramount–Warner Bros. merger, the strategic significance of a Jordanian air base attacked by Iran, highlights from the FIFA World Cup, and new findings on coffee’s impact on heart health.

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Key Discussion Points & Insights

1. Retail Investors Shift from "Mag Seven" to New AI Trades

(00:33–04:11)

• Trend Shift:
  Retail traders are moving away from the so-called "Magnificent Seven" (Microsoft, Apple, Amazon, Meta, Nvidia, Alphabet, Tesla), previously dominant in tech stock portfolios, in search of higher-growth in lesser-known AI plays.

• Where the Money Flows:
  Investors are focusing on companies making components for AI—chipmakers (e.g., Micron, SK Hynix), suppliers of cooling systems for data centers, power providers, and even firms in space and quantum computing.

• Portfolio Exposure:
  Despite waning enthusiasm for new purchases, most investors still have significant exposure to these mega-cap tech stocks via index funds, as "these stocks make up like 36% of the entire S&P 500 index." (C, 03:21)

• Quote:

  "They're starting to realize that they're going to find that [aggressive high growth] in other parts of the market in newer AI plays." – Hannah Aaron Lang (C, 00:37)

  "Retail investors are turning a lot of their attention away from these trillion dollar firms... and they're looking towards companies making the pieces and components that are part of that." – Hannah Aaron Lang (C, 02:27)

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2. Legal Challenge for Paramount–Warner Bros. Merger

(04:15–05:31)

• Legal Roadblock:
  A federal judge granted a temporary 14-day restraining order, halting the $81 billion merger over antitrust concerns. Should litigation stretch past September, Paramount must pay Warner shareholders $650 million quarterly until the deal closes.

• Industry Impact:
  The merger’s delay could be costly and casts uncertainty over the consolidation of big media players.

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3. Oil Market & Geopolitical Update

(04:15–05:31)

• Market Movement:
  Brent crude futures rose above $89/barrel amid Middle East tensions. The Houthi militia in Yemen announced plans to blockade Saudi shipping, threatening alternative oil routes through the Red Sea as Iran tensions flare.

• Stock Market Reaction:
  "Major indexes were slightly lower today with the Dow leading the losses and finishing down 0.6%." (B, 04:15)

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4. U.S. Service Members Killed in Iran-Linked Attack

(06:33–08:47)

• What Happened:
  Three Iranian ballistic missiles penetrated U.S. defenses at a Jordanian base, killing two U.S. service members.

• Strategic Importance of the Base:
  Jordan offers the U.S. strategic depth—closer ties and better defense posture—but is still vulnerable. This base is critical for regional U.S. air operations.

  "It's become increasingly important... The Jordanians give the Americans a lot of leeway and access..." – Michael Gordon (D, 07:17)

• Potential for Escalation:
  President Trump vowed retribution, indicating a possible escalation, even as diplomatic backchannels remain active.

  "It's an ominous development... it sure looks like it could [escalate]." – Michael Gordon (D, 08:17)

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5. World Cup Economic Winners & “Ranch Dressing” Craze

(09:41–12:10)

• Major Winners:
  Smaller U.S. cities such as Philadelphia and Kansas City saw pronounced economic boosts from World Cup tourism, compared to bigger cities like New York and LA.

• Surprising Viral Moments:
  International tourists shared their fascination with American cultural staples like ranch dressing and Chick Fil A, generating viral social media content:

  "Ranch dressing and Chick Fil A might have won the World Cup." – Owen Tucker Smith (A, 11:41)

• Notable Losers:
  Brands like Nike underestimated jersey demand, leading to shortages during peak fan excitement.

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6. Coffee and Heart Health: New Findings

(12:18–13:11)

• Expert Consensus:
  The American Heart Association finds that most adults can safely consume up to five cups of coffee daily (400 mg caffeine) with possible benefits for heart health—lowering risks of heart disease, failure, stroke, and type 2 diabetes.

• Best Practice:
  Researchers warn that sugar or fatty creamers may offset these benefits.

• Office Coffee Habits:
  Journal reporters share their tally, lightheartedly comparing who meets the "optimal" coffee intake level.

  "I have had three so far and I am currently on number four." – Hannah Aaron Lang (C, 13:00)

  "It has to be black coffee without sugar and without milk. And none of the Frou Frou drinks from Starbucks, that's not acceptable." – Michael Gordon (D, 13:04)

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Notable Quotes & Memorable Moments

• "Retail investors are starting to think about the Mag 7 a little differently. There's still a core holding in their portfolio, but they're just not what they're looking to for that aggressive high growth stock." – Hannah Aaron Lang (C, 03:21)

• "Ranch is my new favourite thing." – Unnamed guest (C, 11:37)

• "Chef’s kiss." – Unnamed guest (B, 11:40)

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Timestamps for Key Segments

• Retail investor trends and Mag 7: 00:33–04:11
• Paramount–Warner Bros. merger update: 04:15–05:31
• Oil/market update: 04:15–05:31
• Iran attack on Jordanian base: 06:33–08:47
• Darlene Graham’s Senate bid: 08:48–09:41
• World Cup winners (& Ranch dressing): 09:41–12:10
• Coffee & heart health news: 12:18–13:11

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Takeaway

The episode paints a portrait of shifting retail investor sentiment in tech, heightened geopolitical risks, high-stakes media mergers, and the quirky cultural side-notes of global sports events—all punctuated by reassuring news for coffee lovers. For market-watchers and news-seekers alike, it’s a brisk but insight-rich roundup of the day.

Transcript

[A]

I'm Steve Booth, CEO of Baird, an independent wealth asset management and global capital markets firm. At Baird, our 5,000 plus employees are united by an unwavering commitment to excellence and a genuine passion for helping our clients and each other succeed. As a privately held, truly employee owned company, we treasure our independence since we can focus on delivering results to clients and taking care of our people throughout the cycles in our served markets. Learn [e-mail] WSJ

[B]

retail investors are over the Magnificent 7 Mega Cap tech stocks.

[C]

They're just not what they're looking to for that aggressive high growth stock. They're starting to realize that they're going to find that in other parts of the market in newer AI plays.

[B]

Plus a legal challenge for the $81 billion Paramount Warner Brothers deal. And it's not just Spain. Winners of the World might include Ranch dressing It's Monday, July 20th. I'm Alex Osolleff for the Wall Street Journal. This is the PM edition of what's News, the top headlines and business stories that move the world today. We begin this evening in Shanghai where China's biggest artificial intelligence convention just wrapped up. And that's where Alibaba previewed its newest AI model that it says is among the most powerful available today. The company said Quinn 3.8 Max is second only to Anthropic's most cutting edge model, Fable 5, and that Alibaba plans to make its model available for developers to download and modify soon. Chinese AI models are gaining traction globally. Many of them are open source and they're generally cheaper to run than Western models. Another Chinese company, Moonshot AI, spooked tech stocks in the US this past Friday with the launch of its Kimi K3 model. Speaking of tech stocks, the companies that make up the MAG7 have dominated the US stock market, but now their hold on individual investors seems to be loosening. The market data firm Vanda Research says retail traders are buying fewer shares of Microsoft, Apple, Amazon, Meta, Nvidia, Alphabet and Tesla. Instead, traders are flowing to newer AI trades with names that might not be as famous. Journal Markets reporter Hannah Aaron Lang joins me now with more. Hannah, why is there less of this appetite for Mag 7 from retail right now?

[C]

The Mag 7 kind of ruled the AI trade, especially for the first few years that this has taken hold on Wall Street. Retail investors are turning a lot of their attention away from these trillion dollar firms that are funding the artificial intelligence build out and they're looking towards companies making the pieces and components that are part of that right? So Those making the chips think like Micron or SK Hynix companies that make cooling systems for data centers, power providers and even more far flung space companies and quantum computing. It's like who could be the next set of big beneficiaries as we all start to use AI and integrate it into our everyday lives?

[B]

Okay. That is all to say though, that Max 7 is still hugely influential in the market. Right. It's not like they're going away. I mean, what does less attention on those companies mean for the broader market?

[C]

It's not that retail investors are completely turning away from the Magnificent Seven or from mega cap tech companies. At a whole, a lot of them still maintain significant and exposure to these companies even if they don't own the individual stocks. These stocks make up like 36% of the entire S&P 500 index. So you're heavily exposed to mega cap tech just by investing in the major U.S. stock indexes. I think this just means that investors are starting to think about the Mag 7 a little differently. There's still a core holding in their portfolio, but they're just not what they're looking to for that aggressive high growth stock. They're starting to realize that they're going to find that in other parts of the market in newer AI plays.

[B]

That was WSJ markets reporter Hannah Aaron Lang. Thank you, Hannah.

[C]

Thank you for having me.

[B]

Oil prices finished higher today. Brent crude futures added more than 1% to about $89 a barrel. Traffic in the Strait of Hormuz remains crippled. And the Houthi militia in Yemen today said they would blockade Saudi shipping. That could cut off the Red Sea oil route that Saudi Arabia is using to get around the blockade in Hormuz. Those Middle east tensions and AI anxieties also weighed on stocks. The major indexes were slightly lower today with the Dow leading the losses and finishing down 0.6%. In California, the $81 billion merger of Paramount and Warner Bros. Discovery hit its first major speed bump today. A federal judge has granted a temporary restraining order for 14 days that stops the companies from closing the deal. The court is considering an antitrust challenge from a dozen states and a hearing for a preliminary injunction that would block the deal while the antitrust case proceeds is scheduled for August 3rd. Paramount says it's confident that it can prove that the antitrust arguments have no merit. If the litigation extends beyond the end of September, it could become expensive for Paramount. It agreed to pay Warner shareholders a fee of about $650 million every quarter if the deal didn't by September 30th until the deal does close. And the movie theater chain AMC Entertainment posted a record $1.6 billion in revenue for the second quarter. That's a 14% jump from the previous year. Driven by a stronger domestic box office, its stock closed up about 27%. Coming up, what the U.S. service members deaths could mean for the future of the conflict with Iran plus, how much coffee should you drink for a healthy heart? It's probably more than you think. That's after the.

[C]

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[B]

We're learning more about the Deaths of the U.S. service members killed at a Jordanian air base over the weekend. The Iranian missile attack that killed two soldiers from army air and missile defense units was one of three separate strikes in 24 hours on the Muwafak Salti air base. I'm joined now by WSJ national Security correspondent Michael Gordon. Michael, what do we know about how these deaths happened?

[D]

The US has been building up its capabilities in the region. Iran has been making a concerted effort to target bases in Jordan where US Aircraft and personnel are based, and they managed to get a few missiles through at a major airbase known as msab.

[B]

This Msab base, how important is it for the Iran conflict?

[D]

It's become increasingly important and there are a couple reasons for that. First, the United States has a very close security and foreign policy relationship with Jordan. It's a main provider of military and economic aid to the kingdom and as a consequence the Jordanians give the Americans a lot of leeway and access over flight and basing. So that's one reason the US has put a lot of assets in there. Another reason is it's not as close to Iran as countries like Kuwait and Bahrain, which are getting hit pretty hard by Iranian short range missiles. You're able to defend it somewhat better with anti missile systems, but it's not an impermeable defense. And what happened over the weekend was three Iranian ballistic missiles managed to get through and hit the facility. They hit a hangar. They landed near a gym, and they also hit a housing area which is densely packed with US Personnel.

[B]

What does this show us about where the conflict might go from here?

[D]

It's an ominous development because President Trump said today in a social media post that the Iranians will pay for this action. And it comes at a time when the US Is gearing up for even more force, forceful use of air power. At the same time, there are no doubt some peace efforts going on or at least diplomatic efforts. So one can't say 100% that it's going to escalate, but it sure looks like it could.

[B]

WSJ national security correspondent Michael Gordon. Michael, thanks so much for joining us.

[D]

Thank you.

[B]

A spokesman for U.S. central Command, which oversees American forces in the Middle east, declined to comment on the battle damage caused by the Iranian attacks. Republican Senator Darlene Graham, the sister of Lindsey Graham, said she plans to run for a full Senate term to replace her brother in South Carolina. She was appointed last week by the state's governor to finish her brother's term, which ends in January. Graham had never held public office before. She told Fox News Sean Hannity how she arrived at the decision to run. With the love of my family, with the support of his staff, I know

[D]

I'm a hard worker.

[B]

I learned that from Lindsey. He cared about the people of this state. I've worked for almost 30 years for

[D]

the people of this state. I'm gonna talk about that in a minute.

[B]

I feel like I can do it.

[D]

I feel an inner peace about it.

[B]

Graham has President Trump's backing, a key endorsement in the state. The primary is on August 11th. You may have heard that Spain beat Argentina to win the World cup yesterday. Another big winner, FIFA. US Viewership broke records for the tournament. And now FIFA wants to cash in on the media rights for the next World Cup. Some estimates say U.S. companies could pay as much as $4 billion total for the media rights to the next two tournaments. Others say that's wishful thinking and maybe even double what will eventually be paid. For context, Fox paid about 485 million and Telemundo paid $600 million for the current rights package. That included the women's tournament in 2023 and this year's Men's World Cup. For more on who won what from this year's World Cup, I'm joined now by Journal reporter Owen Tucker Smith. Owen, some cities got a big lift from the tournament, others not so much. Which areas got the biggest boost?

[A]

So New York and LA are Just these huge cities. And so the World cup just takes up a smaller percentage of their overall tourism, whereas slightly smaller cities like Philadelphia or Kansas City, it's going to be more of a boost. It's going to be a few weeks till we really know the overall impact on the US but we're already seeing this kind of split.

[B]

Were there any other unexpected winners and losers from the World Cup?

[A]

One thing is that these foreign tourists, some of them have gone viral for becoming obsessed with, you know, American staples of life like ranch dressing and Chick Fil A and big suburban houses. Those have gotten a lot of attention on social media. People have made a lot of videos filming themselves eating American sized portions for the first time. Some of it, I think is laughing at us. Some of it is laughing with us.

[B]

I love ranch.

[A]

I taste it here, it's delicious.

[B]

And I take two bottles with home.

[D]

That was absolutely banging. To be fair, the Chick Fil A needs to be in UK more.

[B]

Just discovered it.

[C]

Ranch is my new favourite thing.

[A]

We just don't do chicken like this in the uk.

[B]

Chef's kiss.

[A]

Ranch dressing and Chick Fil A might have won the World Cup. We've also seen some losers. There are some brands that might have been caught off guard by how into the World Cup Americans get. It's always unclear, like how much American fans are going to suddenly care about soccer. The Journal had a great story about Nike, which failed to realize how many people were going to want jerseys for the U.S. men's team. And they ran out very quickly and it took them a while to restock.

[B]

That was Journal reporter Owen Tucker Smith. Thanks, Owen.

[A]

Thanks for having.

[B]

And finally, good news for the java addicts among us. Most adults are fine to have five cups of coffee per day and it may even benefit your heart. That's according to a new scientific statement from the American Heart Association. It says that 3 to 58 ounce cups a day, or around 400 milligrams of caffeine, is linked to a lower risk of heart disease, heart failure, stroke and type 2 diabetes. Scientists are still not sure why this is the case, but the sweet spot seems to be two to four cups. So which of our Wall Street Journal colleagues is nailing it so far?

[D]

Today I had two cups of coffee and one full thermos of coffee. It's one of those days. I only have one cup of coffee a day.

[C]

I have had three so far and I am currently on number four.

[D]

It has to be black coffee without sugar and without milk. And none of the Frou Frou drinks from Starbucks, that's not acceptable.

[B]

Michael Gordon, who you heard at the end there, has the right idea. The researchers say that sugar or creamers with a lot of saturated fat can dilute or eliminate the potential health benefits of coffee. But if you need an excuse to reach for that fourth or fifth cup today, well, now you've got one. And that's what's news for this Monday afternoon. Today's show is produced by Anthony Bansy and Danny Lewis with supervising producer Talia. I'm Alex Osolleff for the Wall Street Journal. We'll be back with a new show tomorrow morning. Thanks for listening. Hey, this is Telus Demos and I'm Miriam Gottfried. We're reporters at the Wall Street Journal

[C]

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[B]

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[C]

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[B]

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[C]

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