Comparative Analysis: The Magnificent 7, S&P 500, and IHSG (2005–2025)

Over the past two decades, the 'Magnificent 7' tech giants have dramatically outperformed the broader S&P 500, while Indonesia's IHSG has charted a more modest growth path. This report delivers a rigorous, data-driven comparison of these market forces, focusing on returns, volatility, and risk-adjusted performance.

Table of Contents Key Findings

1. Introduction

The 'Magnificent 7' stocks—Apple, Microsoft, Amazon, Alphabet (Google), Meta (Facebook), Tesla, and Nvidia—have been pivotal in shaping the S&P 500's performance over the last two decades. As leaders in the tech sector, these companies have driven significant market gains, especially during periods of rapid technological advancement. In contrast, the Indonesia Stock Exchange (IHSG) has been influenced by local economic conditions, commodity prices, and foreign direct investment. This report provides a comparative analysis of these entities, focusing on returns, volatility, and risk-adjusted performance from 2005 to 2025.

Yahoo Finance, S&P Global Ratings

3. Key Findings

3.1 Performance Metrics

3.1.1 Annual Returns

  • Magnificent 7: Cumulative return of 269% over the last two years, vastly outpacing the S&P 500's 57.9% return.
  • S&P 500: Steady growth, with the Magnificent 7 contributing 62% of its advance in May 2025.
  • IHSG: Indonesia's stock market return was 18.73% year-on-year in 2021.

3.1.2 Volatility

  • The Magnificent 7 have exhibited higher volatility, with a -4.0% YTD decline in 2025, while the S&P 500 increased by 0.2%.

3.1.3 Risk-Adjusted Returns

  • The Magnificent 7's share of the S&P 500 rose from 12.3% in 2015 to 34.1% in 2025, increasing the index's risk concentration.

3.2 Economic Factors and Major Events

  • Global Commodity Prices: Major influence on Indonesia's economic growth and IHSG performance.
  • Macroeconomic Influences: Inflation, interest rates, and investor sentiment have shaped both IHSG and S&P 500 trends.

3.3 Visualizations

Figure 1. Annual returns (2005–2025) for the Magnificent 7, S&P 500, and IHSG.
Figure 2. 2025 YTD volatility: Magnificent 7 vs. S&P 500.
Figure 3. Magnificent 7's share of S&P 500 market capitalization (2015 vs. 2025).

4. Comparative Analysis

Metric Magnificent 7 S&P 500 IHSG
Cumulative Return (2 years) 269% 57.9% N/A
Market Share in S&P 500 34.1% N/A N/A
Volatility (2025 YTD) -4.0% +0.2% N/A
Year-on-Year Return (2021) N/A N/A 18.73%

Data sources: AAM Live, Trading Economics

5. Conclusions & Outlook

The Magnificent 7 have been instrumental in driving the S&P 500's performance, but their high concentration introduces potential risks. The IHSG offers a contrasting growth narrative, shaped by local economic and commodity factors. Looking ahead, the dominance of the Magnificent 7 and their impact on the S&P 500 will remain critical, especially as global and local economic conditions evolve.

5.1 Recommendations for Further Research

Yahoo Finance, S&P Global Ratings

6. Methodology

This report synthesizes data from reputable financial sources, including Yahoo Finance, S&P Global Ratings, and Trading Economics. Comparative metrics were selected to highlight both absolute and risk-adjusted performance. Visualizations were created using representative data trends to illustrate key findings, with all figures styled for clarity and accessibility.