T. Rowe Price Manager Drops Tesla From 'Magnificent Seven' Lineup
Fund manager David Giroux argues Big Tech isn't in a bubble and names a new tech giant to replace Tesla in the elite group.
The so-called Magnificent Seven — Wall Street's shorthand for the cluster of mega-cap technology stocks that have driven much of the market's recent gains — may be due for a membership review. David Giroux, a prominent fund manager at T. Rowe Price, has decided Tesla no longer belongs in that exclusive cohort and has elevated a different technology giant to take its place, signaling a meaningful shift in how sophisticated institutional investors are reassessing the group's composition.
Giroux's move reflects a broader recalibration that some active managers are quietly undertaking as Tesla's growth narrative becomes harder to reconcile with its valuation. While the electric-vehicle maker once commanded a premium on the strength of its disruptive potential, mounting competitive pressures and margin erosion have made the bull case more complicated to sustain. Replacing it with a company whose fundamentals more cleanly justify a top-tier designation is, in Giroux's view, the analytically honest call.
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Perhaps more consequential than the roster swap is Giroux's broader market read: he does not believe Big Tech as a category is in bubble territory. That assessment carries weight coming from a manager who oversees substantial assets at one of the industry's most respected active firms. The distinction matters because bubble fears have increasingly colored retail and institutional sentiment alike, and a credible rebuttal from a seasoned allocator can shift the terms of the debate.
Even so, Giroux is not positioning his portfolio as a pure technology bet. He sees compelling value in healthcare and utilities — sectors that have lagged the high-growth darlings of the past two years but offer defensive characteristics and reasonable valuations. That barbell thinking, pairing conviction in select tech names with exposure to underappreciated defensive sectors, reflects the kind of nuanced risk management that distinguishes long-horizon active management from momentum-chasing.
The reconfiguration of the Magnificent Seven framework, however informal, carries symbolic and practical weight for retail investors who use the grouping as a mental model for portfolio construction. When an institutional voice of Giroux's caliber redraws the lines, it's worth paying attention. Continue reading at MarketWatch.com
