If you've been paying attention, you've noticed something weird: the Mag7 tech stocks faltered in November-December 2025, while the broader market kept climbing. The S&P 500 is up 16.65% for 2025, but the Mag7 as a group is actually down 1.9% in November alone.
This is the first real sign of market rotation we've seen in months.
What's happening:
The mega-cap tech stocks that powered the entire market rally throughout 2025 are finally getting scrutinized. Investors are asking hard questions about AI valuations, capex spending, and whether these companies can actually deliver the returns that justify their current multiples.
Meanwhile, other sectors are waking up. Energy, financials, industrials, and even some consumer stocks are starting to show strength. The FTSE 100 in the UK is up 21.5% for 2025 - beating the S&P 500 - largely because it has more exposure to these "boring" sectors.
The real story: This isn't a crash. This is a healthy broadening of the market. More stocks participating in the rally is actually bullish long-term.
But here's the risk: If the rotation accelerates too quickly, we could see a correction in the Mag7 that drags down the entire market, since they still represent a huge portion of market cap.
My question for the community: Are you rotating out of tech into value/cyclicals, or are you staying the course? And if you're rotating, which sectors are you moving into?