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Mag 7 Beats S&P 500 in Q3: Buy These 3 ETFs to Tap Their Strength
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The "Magnificent Seven" (Mag 7) stocks have been the undisputed engines of the equity market's recent ascent, drastically outperforming the S&P 500 for much of the past year. This trend continued into the third quarter of 2025, as the cohort solidified its dominance by reporting earnings growth that outperformed the broader index.
Notably, the Mag 7 group’s third-quarter earnings increased 28.3% year over year on 18.1% higher revenues, whereas 94.8% of the S&P 500 Index’s total membership reported earnings growth of 15.6% on 8.3% revenue growth (as of Nov. 21, 2025).
The strong quarterly earnings were largely driven by the Artificial Intelligence (AI) boom, with companies like Nvidia (NVDA - Free Report) benefiting from massive demand for its chips, and cloud giants like Microsoft (MSFT - Free Report) , Alphabet (GOOGL - Free Report) and Amazon (AMZN - Free Report) seeing significant uplift from AI infrastructure buildout. On the other hand, although Meta Platform's (META - Free Report) profits were hit by a one-time tax charge, its underlying operational health remained strong. Meanwhile, Apple (AAPL - Free Report) delivered impressive quarterly numbers backed by strong iPhone and Mac sales. Their sheer size and global reach have also allowed them to demonstrate superior earnings stability despite macroeconomic headwinds. Tesla (TSLA - Free Report) was the only one in this elite group that came up with disappointing third-quarter figures.
What Lies Ahead?
The outlook remains bright, with Wall Street analysts raising Mag 7 earnings growth expectations for the coming year. As of late November, analysts predicted that the Mag 7's earnings growth will average 21% over the next four quarters, up from just 15% at the end of August (as per a report by Investopedia, cited in Yahoo Finance).
Our research forecasts the Mag 7’s earnings to increase 14.6% in 2026 and 16.8% in 2027 (as of Nov. 21, 2025). The group is projected to account for 26% of total S&P 500 earnings in 2026, up from 23.2% in 2024 and 11.7% in 2019.
ETFs to Buy
For investors seeking exposure to the growth opportunities offered by the Mag 7 stocks—without the volatility of selecting individual winners — investing in exchange-traded funds (ETFs) with a heavy Mag 7 weighting provides a strategic advantage. These ETFs offer instant diversification, significantly reducing the risk associated with any single company’s unexpected downturn, while still capturing the sector’s collective growth.
This fund, with a net asset value of $54.52 per share, provides exposure to 50 of the largest companies in the S&P 500 Index. Its top 10 holdings include NVDA (12.07%), APPL (11.55%), MSFT (9.96%), AMZN (6.24%), GOOGL (5.04%), META (3.28%) and TSLA (3.32%).
XLG has surged 19.7% year to date, beating the S&P 500’s return of 16.1%. The fund charges 20 basis points (bps) as fees and holds a Zacks ETF Rank #2 (Buy). It traded at a volume of 2.6 million in the last trading session.
This fund, with a net asset value of $38.72 per share, provides exposure to 91 companies included in the Nasdaq-100 Index that also meet environmental, social and governance criteria. Its top 10 holdings include NVDA (11.99%), APPL (8.72%), MSFT (8.23%), AMZN (3.50%), GOOGL (2.98%) and TSLA (2.68%).
QQMG has soared 23.3% year to date. The fund charges 20 bps as fees and holds a Zacks ETF Rank #2. It traded at a volume of 0.2 million in the last trading session.
This fund, with net assets worth $21.2 billion, offers exposure to 140 U.S. electronics, computer software and hardware, and informational technology companies. Its top 10 holdings include NVDA (15.87%), APPL (15.66%), MSFT (13.65%), GOOGL (3.06%) and META (2.99%).
IYW has surged 26.2% year to date. The fund charges 38 bps as fees and sports a Zacks ETF Rank #1 (Strong Buy). It traded at a volume of 0.6 million in the last trading session.
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Mag 7 Beats S&P 500 in Q3: Buy These 3 ETFs to Tap Their Strength
The "Magnificent Seven" (Mag 7) stocks have been the undisputed engines of the equity market's recent ascent, drastically outperforming the S&P 500 for much of the past year. This trend continued into the third quarter of 2025, as the cohort solidified its dominance by reporting earnings growth that outperformed the broader index.
Notably, the Mag 7 group’s third-quarter earnings increased 28.3% year over year on 18.1% higher revenues, whereas 94.8% of the S&P 500 Index’s total membership reported earnings growth of 15.6% on 8.3% revenue growth (as of Nov. 21, 2025).
The strong quarterly earnings were largely driven by the Artificial Intelligence (AI) boom, with companies like Nvidia (NVDA - Free Report) benefiting from massive demand for its chips, and cloud giants like Microsoft (MSFT - Free Report) , Alphabet (GOOGL - Free Report) and Amazon (AMZN - Free Report) seeing significant uplift from AI infrastructure buildout. On the other hand, although Meta Platform's (META - Free Report) profits were hit by a one-time tax charge, its underlying operational health remained strong. Meanwhile, Apple (AAPL - Free Report) delivered impressive quarterly numbers backed by strong iPhone and Mac sales. Their sheer size and global reach have also allowed them to demonstrate superior earnings stability despite macroeconomic headwinds. Tesla (TSLA - Free Report) was the only one in this elite group that came up with disappointing third-quarter figures.
What Lies Ahead?
The outlook remains bright, with Wall Street analysts raising Mag 7 earnings growth expectations for the coming year. As of late November, analysts predicted that the Mag 7's earnings growth will average 21% over the next four quarters, up from just 15% at the end of August (as per a report by Investopedia, cited in Yahoo Finance).
Our research forecasts the Mag 7’s earnings to increase 14.6% in 2026 and 16.8% in 2027 (as of Nov. 21, 2025). The group is projected to account for 26% of total S&P 500 earnings in 2026, up from 23.2% in 2024 and 11.7% in 2019.
ETFs to Buy
For investors seeking exposure to the growth opportunities offered by the Mag 7 stocks—without the volatility of selecting individual winners — investing in exchange-traded funds (ETFs) with a heavy Mag 7 weighting provides a strategic advantage. These ETFs offer instant diversification, significantly reducing the risk associated with any single company’s unexpected downturn, while still capturing the sector’s collective growth.
Invesco S&P 500 Top 50 ETF (XLG - Free Report)
This fund, with a net asset value of $54.52 per share, provides exposure to 50 of the largest companies in the S&P 500 Index. Its top 10 holdings include NVDA (12.07%), APPL (11.55%), MSFT (9.96%), AMZN (6.24%), GOOGL (5.04%), META (3.28%) and TSLA (3.32%).
XLG has surged 19.7% year to date, beating the S&P 500’s return of 16.1%. The fund charges 20 basis points (bps) as fees and holds a Zacks ETF Rank #2 (Buy). It traded at a volume of 2.6 million in the last trading session.
Invesco ESG NASDAQ 100 ETF (QQMG - Free Report)
This fund, with a net asset value of $38.72 per share, provides exposure to 91 companies included in the Nasdaq-100 Index that also meet environmental, social and governance criteria. Its top 10 holdings include NVDA (11.99%), APPL (8.72%), MSFT (8.23%), AMZN (3.50%), GOOGL (2.98%) and TSLA (2.68%).
QQMG has soared 23.3% year to date. The fund charges 20 bps as fees and holds a Zacks ETF Rank #2. It traded at a volume of 0.2 million in the last trading session.
iShares U.S. Technology ETF (IYW - Free Report)
This fund, with net assets worth $21.2 billion, offers exposure to 140 U.S. electronics, computer software and hardware, and informational technology companies. Its top 10 holdings include NVDA (15.87%), APPL (15.66%), MSFT (13.65%), GOOGL (3.06%) and META (2.99%).
IYW has surged 26.2% year to date. The fund charges 38 bps as fees and sports a Zacks ETF Rank #1 (Strong Buy). It traded at a volume of 0.6 million in the last trading session.