Watch February Earnings From NVIDIA and Microsoft to Predict Where This Mag7 ETF Goes Next

The Roundhill Magnificent Seven ETF (NYSEARCA:MAGS) provides equal-weight exposure to the seven largest tech companies for investors seeking diversified exposure to this basket without selecting individual stocks. The fund holds NVIDIA Corporation (NASDAQ:NVDA | NVDA Price Prediction), Alphabet Inc (NASDAQ:GOOGL), Microsoft Corporation (NASDAQ:MSFT), and Meta Platforms Inc (NASDAQ:META) in equal portions alongside Apple Inc (NASDAQ:AAPL), Amazon.com Inc (NASDAQ:AMZN), and Tesla Inc (NASDAQ:TSLA).

After strong performance in 2025, the fund has delivered nearly 24% returns over the past year, though momentum has stalled in early 2026 as investors reassess valuations.

AI Infrastructure Spending Remains the Primary Driver

The biggest factor affecting MAGS is whether enterprise AI spending continues accelerating. Goldman Sachs estimates global AI-related data center capital expenditures will reach $527 billion in 2026, representing a significant tailwind for the Mag7 basket. Six of the seven companies are either building that infrastructure or selling the tools to power it, positioning them to capture the majority of this spending wave.

Recent developments show the infrastructure race accelerating, with supply constraints emerging for NVIDIA’s latest H200 chips even as tariff concerns mount. Meta has secured long-term power agreements to fuel its AI ambitions through the next decade, while Google’s Gemini 3 release demonstrated the competitive intensity driving these companies forward.

Watch quarterly earnings reports, particularly commentary on AI capital expenditure plans. NVIDIA reports late February for its fiscal Q4, while Microsoft, Google, Amazon, and Meta all report in late January or early February. If management teams maintain or increase AI infrastructure guidance, that supports continued momentum. If they signal spending moderation, expect pressure across the entire basket.

Equal-Weight Rebalancing Creates Volatility and Opportunity

The fund’s equal-weight approach creates a natural discipline mechanism. When one stock significantly outperforms, quarterly rebalancing forces the fund to take profits and redistribute capital to laggards. This prevented MAGS from fully capturing NVIDIA’s surge last year, but it also ensures the portfolio doesn’t become dangerously concentrated in a single name.

The fund’s swap structure creates unique performance characteristics that investors should understand. The fund uses equity swaps to gain leveraged exposure, with about 62% of the portfolio sitting in synthetic positions while maintaining a negative cash offset. This structure amplifies both gains and losses without technically being a leveraged ETF.

Check the fund’s monthly fact sheet on Roundhill’s website to monitor how swap exposure shifts and whether the negative cash position expands, which would indicate increased leverage.

The Takeaway

MAGS provides equal-weight exposure to all seven Mag7 stocks, though its equal-weight structure and swap mechanics mean the fund will underperform when one or two names dominate. The fund’s performance depends heavily on whether AI infrastructure spending continues driving earnings growth across the basket through 2026.

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