Broadcom and Oracle's Blowout Earnings Just Proved Why It's Time to Forget the "Magnificent Seven"
News Summary
Broadcom and Oracle recently delivered exceptional earnings reports and guidance, propelling both tech stocks to all-time highs and outperforming most "Magnificent Seven" stocks (except Nvidia) over the past five years. The article argues that the "Magnificent Seven" no longer accurately represents the market's leading growth stocks, proposing a new group called the "Ten Titans" which adds Broadcom, Oracle, and Netflix. Combined, the "Ten Titans" now account for 39.1% of the S&P 500, up from 33.7% for the "Magnificent Seven." Broadcom has transformed through its acquisition of VMware and the development of AI chips (XPUs), becoming a diversified investment in AI infrastructure. Oracle's Cloud Infrastructure (OCI) is projected for explosive growth, with revenue potentially reaching $144 billion in future years, actively disrupting incumbent cloud giants. Despite high current valuations, investors are highly optimistic about their future growth prospects. The robust performance and market influence of Broadcom and Oracle underscore that the "Ten Titans" are now key drivers of market sentiment and index movements, with their results significantly impacting broader market performance.
Background
The "Magnificent Seven" typically refers to a small group of mega-cap, high-growth U.S. technology companies (e.g., Apple, Microsoft, Amazon, Google, Meta, Tesla, Nvidia) that have dominated market performance and index gains in recent years. The article's introduction of the "Ten Titans" concept represents an update to this landscape, aiming to include emerging, equally influential technology forces. Broadcom is a leading global provider of semiconductor and infrastructure software solutions. Through strategic acquisitions (like VMware) and innovation in custom AI chips (ASICs, such as XPUs), it is actively expanding its footprint in the artificial intelligence and cloud infrastructure markets. Oracle, a long-established enterprise software and database giant, has seen its Cloud Infrastructure (OCI) business rapidly grow in recent years, fiercely competing with rivals like Amazon AWS, Microsoft Azure, and Google Cloud, becoming its new growth engine.
In-Depth AI Insights
Does the rise of the "Ten Titans" signify a profound shift in the tech investment paradigm, rather than just a simple changing of market leaders? - Yes, this indicates a deeper transformation. It reflects the accelerated transition of AI and highly specialized cloud infrastructure from concept to large-scale commercial deployment. While the "Magnificent Seven" largely represented the maturity of platform economies and consumer internet applications, the "Ten Titans" highlight the strategic value of enterprise AI and backend computing capabilities. - This shift means investors need to focus more on technological moats at the infrastructure level, rather than solely on front-end application user growth. Companies providing AI compute, networking, and specialized cloud services, whose revenues are directly tied to enterprise digital transformation and the AI arms race, demonstrate stronger pricing power and growth certainty. Given their high valuations, what are the sustainability and risks for Broadcom and Oracle in the current (2025) high-interest-rate environment? - Risks primarily stem from the market's extremely high expectations for future growth. The elevated forward P/E ratios for both companies (Broadcom 54.8, Oracle 48.2, both higher than Nvidia) suggest that any signs of missed earnings or decelerating growth could trigger significant corrections. - Sustainability, however, relies on the continuous strengthening of their core technologies and market positions. Broadcom's AI chips (XPUs) and networking products play a critical role in building large-scale AI data centers, creating technological barriers. Oracle OCI's cost-effectiveness and integration advantages with existing database customers provide stickiness in the enterprise market. As long as these competitive advantages translate into consistently exceeding expectations in orders and revenue, the high valuations can be somewhat justified. What are the potential implications of the "Ten Titans" on the global tech ecosystem and geopolitical strategic competition? - The emergence of the "Ten Titans" reinforces the United States' leadership in global technology. These companies hold core technologies and market shares in critical areas like AI, cloud computing, and semiconductors, exerting a decisive influence on the construction and development of global digital infrastructure. - This concentration could also intensify geopolitical competition. As nations increasingly view AI and cloud computing as central to national security and economic competitiveness, reliance on these "Ten Titans'" technologies and services will spark tensions over data sovereignty, supply chain security, and technology export controls. For example, demand for Broadcom's AI chips may further highlight the strategic vulnerabilities of the semiconductor supply chain.