Investor sentiment towards the seven large tech stocks referred to as 'M7 (Magnificent 7)' that lead the U.S. stock market has declined. On the 22nd (local time), The Wall Street Journal (WSJ) reported, "Expectations of retail investors in big tech are cooling."

One of the large tech stocks leading the U.S. stock market, known as 'M7 (Magnificent 7)', is the Apple store /Courtesy of Xinhua News Agency=Yonhap News.

According to market research firm Banda Research, after the mutual tariff announcement by the Donald Trump administration on April 2nd, when market turmoil began, the share of M7 and other big tech stock purchases by individual investors reached 41%. However, by mid-month, this figure had decreased to 23%, about half. Investors who previously drove M7 stock prices up have reduced their purchases of M7.

Earlier, M7 stocks were severely impacted by President Trump’s mutual tariff announcement. Since these corporations have many overseas production bases, the damage from mutual tariffs is inevitable. The day after the mutual tariff announcement, Apple's stock fell by 9.2%, while other companies such as ▲NVIDIA -7.81%, ▲Microsoft -2.36%, ▲Alphabet (Google's parent corporation) -4.02%, ▲Tesla -5.47%, ▲Amazon -8.98%, and ▲Meta (Facebook's parent corporation) -8.96% also experienced significant declines.

At that time, investors led by M7 were purchasing these stocks in large quantities at low prices as the New York Stock Exchange fell. The WSJ noted, "A buying frenzy of low-priced stocks worth billions of dollars quickly drove M7 stock prices close to historical highs." For instance, NVIDIA's stock price, which was only $94.31 per share on April 3rd, recovered to $143.85 by the 20th of this month.

However, recently, the perception that M7 stocks have risen sufficiently has spread, leading investors who bought M7 stocks at low prices to sell those stocks, according to WSJ. Tom Griffin from Texas, who purchased Tesla and NVIDIA stocks during the sharp decline, has recently been acquiring stocks from the largest health insurance company in the U.S., UnitedHealth, and major bank Wells Fargo instead of M7. Griffin stated, "Rather than trying to avoid tech stocks, I am looking for stable and reliable large corporations at reasonable prices."

As skepticism towards M7 stocks grows, the inflow of funds into tech stocks is also decreasing. According to financial information provider Morningstar Direct, $7.1 billion has flowed into tech-focused exchange-traded funds (ETFs) this year, while $25 billion has flowed into funds that buy undervalued stocks. $70 billion has flowed into overseas ETFs. Interest in other stocks instead of tech stocks has increased.

Steve Sosnick, chief strategist at global brokerage Interactive Brokers, said, "Investors' perspectives have broadened," adding that "(M7) has risen too rapidly so far, and people are no longer going after more purchases."

However, there are analyses suggesting that investor expectations for M7 still remain. One of the M7 companies, Microsoft, has recently set a new all-time high. Other companies like NVIDIA, Tesla, and Apple are still among the most traded stocks on the Interactive Brokers platform.

The WSJ remarked, "New indicators are expected to be released this week that can gauge the impact of the tariff policy, which caused the stock price drop in April, on the economy," stating, "Analysts will be able to clarify the effects of trade changes on U.S. corporations, especially with the second-quarter earnings report to be released this summer."