MAGS ETF

The Magnificent Seven stocks are overvalued due to speculative retail investor activity, with potentially limited EPS growth expected from AI advancements. The rise of Chinese AI competitors like DeepSeek highlights the vulnerability of US tech giants to more nimble innovators. Market exuberance post-election is fading, suggesting a bearish outlook for the Roundhill Magnificent Seven ETF, highlighted by the panic selling activity surrounding DeepSeek, indicating a buyer-seller imbalance.

The Roundhill Magnificent Seven ETF offers efficient, low-cost exposure to Mag7 companies, with strong liquidity and low spreads. MAGS uses derivative instruments like swaps to replicate target companies' performance. With a 1-year return of 61.65%, MAGS has outperformed the S&P 500 significantly, showcasing its ability to capitalize on the growth of the Magnificent Seven stocks.

MAGS remains a compelling ETF Buy for investors seeking high growth through the Magnificent 7 stocks, thanks to their robust long-term prospects. Much of their outperformance is attributed to the ongoing cloud super cycle, robust e-commerce demand, and market leading smartphone/ EV sales. This is on top of the improved margin of safety from the recent correction from December 2024 peaks, a common trend that we have observed in prior earning seasons.