For a few years, owning US tech was easy. You bought the Magnificent Seven, or a tracker stuffed with them, and the line on your ISA app went up. Apple, Microsoft, Nvidia, Alphabet, Amazon, Meta and Tesla rose and fell together, and pretty much everyone treated them as one big bet on the future.
That’s no longer true. The seven now move at different speeds and sometimes in opposite directions. They’re spending eye-watering sums on artificial intelligence in very different ways. If your pension or ISA leans heavily on them, and there’s a good chance it does, it’s worth knowing what you’re actually backing.
Why are the Magnificent Seven no longer moving together?
The label was always a bit of marketing. It put a chip designer, a phone maker, an online shop, two advertising businesses, a software house and a car company into one basket. They rose together because investors were betting on the same thing: big tech wins.
AI has exposed the differences. Nvidia sells the picks and shovels, the chips everyone else is queuing up for. Microsoft, Alphabet and Amazon are spending heavily on data centres and hoping cloud customers pay to rent them. Meta is pouring advertising profits into AI with no cloud business to sell it through. Apple has moved more cautiously. Tesla’s share price depends more on what you think of robotaxis and Elon Musk than on any spreadsheet.
Those are different businesses with different risks. One firm’s huge capital spending is another firm’s revenue. When investors start asking whether all that spending will ever pay off, the companies paying the bill and the company getting paid don’t react the same way.
How much of my tracker fund is in the Magnificent Seven?
Probably more than you think. At the end of September 2025, the seven made up 32.2% of the S&P 500, according to First Trust. They also delivered 41.8% of the index’s total return over the first nine months of that year.
Put that in pounds. Put £20,000 into an S&P 500 tracker in your ISA and roughly £6,440 of it sits in just seven companies. Many global trackers, the default choice in plenty of workplace pensions and SIPPs, are dominated by the US too, so the same names sit near the top there as well.
The FTSE 100 is almost the opposite. Its heavyweights are names like AstraZeneca, HSBC, Shell and Unilever: banks, oil, drugs and consumer goods, with hardly any tech. For years that looked dull. Now it gives you something the US market increasingly doesn’t, a set of earnings that don’t depend on the AI boom.
A tracker isn’t neutral. It owns the most of whatever has gone up the most, so the more popular a trade gets, the more of it you hold.
Picking companies, not a club
If the seven are now seven separate stories, treating them as one bet makes less sense. That doesn’t mean you should start stock-picking. It means asking better questions about whatever you already hold.
Start with the fund factsheet. Every tracker and active fund publishes its top ten holdings and country split. Add up how much sits in the seven, then add any shares you hold directly. Lots of people hold an S&P 500 tracker, a global tracker and a tech fund in different accounts, and end up owning Nvidia three times without noticing.
Then ask what each company needs to go right. Does it make money from AI today, or is it spending now in the hope of making money later? How much of its value depends on growth that hasn’t happened yet? You don’t need firm answers. But if you can’t explain why you own something, that’s a warning sign in itself.
Finally, decide how much you could stand to see fall without selling in a panic. If you’re 58 and planning to draw your SIPP in five years, a sharp tech sell-off is a much bigger problem than it is for a 30-year-old. Rebalancing within a wrapper, by trimming what has grown and topping up what hasn’t, is one way to keep a concentrated bet from quietly taking over your plans.
Should I hold US tech shares in an ISA or a SIPP?
The wrapper matters more than people assume, especially for US shares. In the 2025/26 tax year you can pay up to £20,000 into ISAs. Growth and income inside are free of UK tax, and anything you take out is tax-free too. Inside a SIPP you get tax relief on the way in at your marginal rate, and Scottish taxpayers claim it at Scottish income tax rates. You can usually take 25% tax-free and the rest is taxed as income when you draw it.
Outside a wrapper, the bills add up. The capital gains tax annual exempt amount is just £3,000, with gains above it taxed at 18% or 24%. The dividend allowance is £500. Dividend tax rates are going up from April 2026, with the basic rate moving from 8.75% to 10.75% and the higher rate from 33.75% to 35.75%. A higher-rate taxpayer with £10,000 of dividends outside a wrapper would see the bill on the taxable £9,500 rise from about £3,206 to about £3,396. Dividend rates are the same across the UK, so Scotland’s separate income tax bands don’t apply to them.
There’s also US withholding tax on dividends. Fill in a W-8BEN form, which most platforms handle when you open the account, and the standard 30% drops to 15%. In an ISA that 15% is lost for good, because the US doesn’t recognise ISAs. Many SIPP providers can get it cut to nil under the UK–US tax treaty’s pension rules. Most of the seven pay small dividends or none at all, so the difference is modest, but it’s one reason some investors hold US income shares in a pension and keep ISAs for the rest.
The safety net that isn’t
One thing to be clear about: the Financial Services Compensation Scheme protects you if a regulated firm fails. It doesn’t protect you if your shares fall in value. If a tech sell-off takes 30% off your ISA, that’s investment risk, not something you can claim back.
If you’re rethinking a large pension or moving money ahead of retirement, Pension Wise offers free guidance to people aged 50 and over with defined contribution pensions, and MoneyHelper covers the basics. For a decision about your own portfolio, look for a financial adviser regulated by the FCA.
In short
The Magnificent Seven are no longer one trade. They’re seven businesses with different AI strategies and very different risks, and together they make up about a third of the S&P 500. Check how much of your ISA, SIPP and trackers sits in them, consider the steadier FTSE 100 heavyweights for balance, and use tax wrappers to protect any gains. For big decisions, talk to Pension Wise, MoneyHelper or an FCA-regulated adviser.
Sources
Midcent Money
Andrew Ingram writes about money for men 45 and over – the years when retirement starts to feel real and the decisions get bigger. Pensions and retirement planning, investing, savings, mortgages and tax: what changed, what it means for your plans and what's worth doing about it. No hype, nothing to sell, and a clear steer on when it pays to get personal advice.
One of Midcent's writers. Spotted something? Write to andrew@midcent.uk.
