Global stock markets are entering 2026 after three exceptionally strong years. Since the launch of ChatGPT, leading US technology stocks, the so-called Magnificent 7, have dominated headlines, fuelled by record investment into artificial intelligence infrastructure.
As we move into 2026, that narrative is starting to change. The “AI-at-any-cost” trade is showing early cracks. Investors are becoming more selective, increasingly questioning high spending, stretched valuations, and unclear monetisation. As a result, capital is gradually rotating away from US mega-cap tech and towards more diversified opportunities outside the US. That is exactly where the GRANOLAS come into play.
GRANOLAS, short for GSK, Roche, ASML, Nestlé, Novartis, Novo Nordisk, L’Oréal, LVMH, AstraZeneca, SAP, and Sanofi, are a group of leading European companies spanning healthcare, technology, and consumer brands.
In 2025, the Magnificent 7, as measured by eToro’s Magnificent 7 Smart Portfolio, delivered a return of 23.3%. While still strong, this marked a clear slowdown from the nosebleed gains of earlier years. Performance was also uneven, driven by a small number of winners while others struggled to maintain momentum.
Over the same period, the eToro GRANOLAS Smart Portfolio returned 18.97%, outperforming both the S&P 500 and EU STOXX 600. Their performance highlighted that investors do not need overexposure to US big tech to find growth. Healthcare, luxury, and high-quality European industrials proved they can deliver attractive returns with a different risk profile. In 2026, the AI premium is being questioned. Investors are no longer impressed by spending alone. They want to see margins, cash flows, and tangible monetisation.
This shift is already visible in early 2026 performance. While the Magnificent 7 is hovering around flat returns, the GRANOLAS have already gained 4.57%, reflecting renewed interest in European equities and more balanced growth stories.
The outlook for GRANOLAS in 2026 appears particularly compelling for a few reasons.
First, valuations remain significantly more attractive. GRANOLAS trade at roughly a 30% P/E ratio discount to the Magnificent 7, offering better value for investors concerned about overstretched US tech multiples.
Second, in another year of elevated uncertainty, GRANOLAS provide more income. At an attractive dividend yield of around 2.5% to 3%, they outshine the tiny yield of roughly 0.3% for the Magnificent 7.
Third, GRANOLAS offer greater stability thanks to diversification across healthcare, consumer staples, luxury, and enterprise software. This stands in contrast to the Magnificent 7, which remains heavily concentrated around the AI theme.
The era of the Magnificent 7 is not over, but it is maturing. In 2026, the market is rewarding diversification. By looking toward GRANOLAS, investors can potentially gain exposure to global growth and AI-related upside through companies like ASML, while avoiding an all-in bet on US mega-cap tech.
This communication is for information and education purposes only and should not be taken as investment advice, a personal recommendation, or an offer of, or solicitation to buy or sell, any financial instruments. This material has been prepared without taking into account any particular recipient’s investment objectives or financial situation and has not been prepared in accordance with the legal and regulatory requirements to promote independent research. Any references to past or future performance of a financial instrument, index or a packaged investment product are not, and should not be taken as, a reliable indicator of future results. eToro makes no representation and assumes no liability as to the accuracy or completeness of the content of this publication.
