Wisevoter
World

Emerging Markets Outperformed US Tech Stocks

Global equity indices saw broader growth while the Magnificent Seven lagged over the past 18 months.

Updated on Sept. 30, 2026 in Investing

Bold vector editorial illustration of stacked industrial shipping containers, representing the expansion of global market trade.
Emerging markets significantly outpaced US technology stocks over the last 18 months, as global investors sought growth outside the Magnificent Seven. AI Illustration. Upload story photo >

Live Poll

Is now a good time to diversify your investments beyond major technology companies?

Emerging markets significantly outperformed US technology stocks over the past 18 months, with the MSCI Emerging Markets Index returning 62 percent. This shift marked a transition where market leadership broadened beyond the concentrated Magnificent Seven tech trade.

Why it matters

The performance divergence highlights a shift in investor focus as fundamental improvements in diverse regions and sectors gained traction over mega-cap technology. This broadening market participation suggests investors sought value and growth opportunities beyond the US tech sector.

The MSCI Emerging Markets Index posted a 62 percent return over the past 18 months, while the Russell 1000 Value and Russell 2000 Value indices gained 40 and 39 percent, respectively. In contrast, the Magnificent Seven stocks returned 25 percent during the same timeframe.

The players

Franklin Templeton Institute

This is a research division that provides macroeconomic analysis and investment insights for global asset management.

Magnificent Seven

This group consists of seven major US technology companies, including Apple, Microsoft, Amazon, Alphabet, Meta Platforms, Nvidia, and Tesla.

The details

Investors increasingly looked beyond the US technology trade, favoring a wider group of companies and regions supported by improved fundamentals. Market leadership shifted as earnings growth moved away from the narrow concentration of the Magnificent Seven, which includes Apple, Microsoft, Amazon, Alphabet, Meta Platforms, Nvidia, and Tesla.

Timeline

  1. Over the past 18 months, emerging markets delivered a 62 percent return.

  2. In January 2025, the Franklin Templeton Institute predicted broader market participation.

  3. By March 2026, markets had recovered from previous lows.

Market Dynamics

This transition follows the January 2025 Franklin Templeton Institute forecast, which argued that return concentration in US mega-cap technology was unlikely to persist. The current market data validates that transition as leadership extended to a wider array of sectors and global regions.

Retail investors may need to adjust portfolio allocations as market volatility increases due to tighter global liquidity. Future market phases will likely require increased selectivity when choosing assets across diverse global regions and value-oriented sectors.

The takeaway

The move away from tech-heavy portfolios underscores the importance of geographic and sectoral diversification for long-term growth. Investors should prepare for higher volatility in the next market cycle by focusing on companies with solid fundamental earnings growth.

Further reading

For more information on historical asset trends, explore the Investing section.

Source note: This article includes information reported by MoneyControl.

Live Poll

Is now a good time to diversify your investments beyond major technology companies?