The "Big Seven" of the US stock market face an unfavorable start in 2026; the market is expected to remain volatile in the short term.

Under the dual pressure of geopolitical conflicts and industry uncertainty, tech stocks got off to a weak start in 2026, and the market generally expects the near term to remain a choppy, range-bound pattern.

Zhitong Finance APP learned that, according to data, in the first quarter the NASDAQ-100 (Nasdaq 100 Index) fell cumulatively by about 7.1%, marking its largest quarterly decline in a year. Large tech stocks weakened across the board, and all of the “Magnificent Seven” recorded declines. Among them, Microsoft (MSFT.US) fell 23%, the worst quarterly performance since 2008; Meta Platforms (META.US) dropped 13%, its worst quarter since 2022. Even NVIDIA (NVDA.US), which performed relatively best, still fell 6.5% in the first quarter.

Market analysts believe that the Middle East conflict—especially the situation in Iran—is one of the key factors weighing on tech stocks. Soaring oil prices have hit investors’ risk appetite, prompting capital to pull back from high-growth technology stocks. At the same time, higher energy prices may keep inflation at elevated levels, thereby limiting the scope for interest rates to fall and putting downward pressure on growth stock valuations.

Tom Essaye, founder of Sevens Report, said that the impact of the conflict is not only reflected at the energy level; it may also weaken the region’s—particularly capital from places such as the UAE and Saudi Arabia—willingness to invest in AI companies.

Although the NASDAQ-100 rose more than 1%% on Wednesday, showing that the market holds some expectations that the conflict could end, even if geopolitical risks ease, the tech sector still faces internal challenges.

Among them, the size of AI investment is the focus of market attention. Tech giants, including Alphabet (GOOG.US, GOOGL.US), Amazon (AMZN.US), Meta (META.US), and Microsoft (MSFT.US), are investing hundreds of billions of dollars to build AI infrastructure. However, with the path to AI commercialization not yet fully clear, this level of high spending is compressing free cash flow and increasing risk levels, leading the market to re-evaluate their valuations.

Analysts noted that the market wants to see more specific examples of AI applications taking hold, not just technical visions. At the current stage, investors are more focused on whether AI demand in the near term is sufficient to support the construction of expensive data centers.

At the level of the industrial supply chain, AI compute demand remains strong. Chip companies represented by NVIDIA and storage manufacturers have both said that demand is still greater than supply, but the market expects that this demand will be reflected in cloud computing revenues.

Looking ahead, tech stocks still have potential room for recovery. According to FactSet, the “Magnificent Seven” generally have target prices above their current stock prices. For example, Apple (AAPL.US) has an average target price of about $297.97, implying about 17% upside versus the latest closing price; Tesla (TSLA.US) has a target price of about $410.63, corresponding to roughly 7% upside potential.