Tesla

Tesla (TSLA) delivered a record 480,126 vehicles in Q2 2026, up 25% year-over-year, while producing about 452,000 vehicles during the quarter. Despite the strong delivery beat, shares slumped 8% following the report, with the stock now down more than 9% year

For more than three years, the ‘Magnificent Seven’ or ‘Mag 7’, which includes Nvidia, Apple, Microsoft, Alphabet, Amazon, Meta and Tesla, carried Wall Street.

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Then came June 2026.

Nvidia dropped over 5%, Microsoft fell about 17%, its worst monthly performance since December 2000, Alphabet declined nearly 6%, Amazon lost roughly 12% and Meta dropped around 11%.

As for Apple and Tesla, the companies had directionally different but equally volatile monthly moves.

Apple made a new all-time high closing price of $315.2 on the second day of the month but subsequently declined more than 10% from that peak.

On the other hand, Elon Musk’s company dropped more than 6% in the first week of June but clawed most of that back by the close of the month, ending roughly flat.

Taken together, the ‘Magnificent Seven’ erased about $2.3 trillion (€2tn) in market value in a single month.

What made the selloff remarkable was its breadth. Usually one or two stocks stumble while the others hold up. This time, nearly every member of the group moved lower.

The Roundhill Magnificent Seven ETF (MAGS), which holds all seven companies, fell about 13% from its late May record high.

So what happened to Wall Street’s favorite technology stocks? And why are investors backing away?

Growing pains and spending

The MAGS ETF bled more than $700 million (€615mn) over the month, its worst outflow since it launched in 2023, according to TradingView data. For a fund that had become the simplest way to bet on the US tech boom, the reversal was striking.

One name outside the club had it even worse. Oracle, a hyperscaler not included in the ‘Magnificent Seven’, crashed around 35%, its steepest month since September 1990, after alarming investors with a surge in AI spending and debt.

The fall wiped roughly $100 billion (€87.9bn) off the fortune of co-founder and billionaire Larry Ellison. The market punished the biggest AI spenders, and the numbers explain it.

The five largest hyperscalers are set to spend more than $700 billion (€615bn) on AI infrastructure this year. Microsoft alone is heading towards roughly $190 billion (€167bn), according to estimates from the Bank of America.

The bank said that hyperscaler capital spending has jumped from about 70% of operating cash flow in 2025 to nearly 100% in 2026.

The translation is simple: far less capital left over for share buybacks and dividends, and an increasingly larger bill that will need to be justified with future revenue as costs are climbing too.

The ‘Magnificent Seven’ are the biggest buyers of the memory that feeds AI data centres, and those chips have become scarce and expensive.

Micron Technology, one of the main memory chipmakers, reported earnings per share of $24.67 for its latest quarter, up from $1.68 a year earlier, close to a fifteenfold jump.

Prices for DRAM, the memory inside almost every device, rose as much as 98% in the first quarter alone, a surge some in the industry have nicknamed “RAMageddon”.

A quieter shift beneath the surface

While the biggest technology stocks struggled, the rest of the market continued to rise.

LPL Financial chief equity strategist Jeff Buchbinder points to that trend. Excluding the ‘Magnificent Seven’, the remaining S&P 500 companies grew earnings by 17.5% in the first quarter, helped in part by semiconductor and memory producers.

Buchbinder expects that figure to exceed 20.5% in the second quarter. Meanwhile, the earnings growth projection for the ‘Magnificent Seven’ will be lower than that.

In other words, the other 493 companies are now growing earnings faster than the market’s biggest stars, and investors have noticed.

By late June, the S&P 493 – which excludes the ‘Magnificent Seven’ – had climbed 13.7% for the year. In contrast, the ‘Magnificent Seven’ basket was down 6.6%, while the broader S&P 500 posted a more modest 7.4% gain.

According to veteran investor Ed Yardeni, investors are beginning to show signs of AI fatigue, questioning whether unprecedented spending on infrastructure will ultimately generate attractive returns as cheaper open source models proliferate and AI token prices continue to decline.

Are the ‘Magnificent Seven’ still “magnificent”?

The ‘Magnificent Seven’ still delivered an estimated 29% earnings growth in the first quarter, and they are unlikely to lose their leadership positions anytime soon.

Yet, the debate has shifted.

Investors are no longer asking whether AI will transform the economy. They are asking when hundreds of billions of dollars in AI investment will begin producing meaningful returns.

June may have offered the first clear answer.

The AI trade is no longer a one way bet on seven companies. The ‘Magnificent Seven’ created the AI boom, but they are no longer the only way to invest in it.

Lawsuit claims Tesla’s Autopilot shortcomings led to fatal crash; family seeks $1m in damages and punitive measures.

The family of a Texas woman who was killed has filed a lawsuit against Tesla after a driver using a Model 3’s automated driving assistance system crashed into a suburban Houston home last week.

The complaint, filed on Tuesday, argues that Tesla should be held liable for the wrongful death of 76-year-old Martha Avila. The family alleges that the automaker, led by Elon Musk, failed to adequately warn drivers about alleged defects in its Autopilot and Full Self-Driving systems.

Avila’s daughter, Jennifer Barbour, and her husband, Justin Barbour, said the Model 3’s driver, Michael Butler, told law enforcement he engaged Autopilot before ploughing through the front wall of Avila’s home in Katy, Texas, the United States, on June 19, pinning her before she succumbed to her injuries at a nearby hospital, according to the complaint.

Video obtained by KHOU – Houston’s CBS affiliate — shows the car travelling at top speed over the front lawn of Avila’s home in the Houston suburb before slamming into the front room.

The driver told the Harris County Sheriff’s Office that he was using the technology at the time of the accident. The driver in the incident was not under the influence of alcohol and is cooperating with authorities.

Butler is also a defendant in the Barbours’ lawsuit. It is unclear whether he has a lawyer.

Musk, the world’s richest person, posted on X on Monday night: “FSD drives slowly through neighbourhood streets and this was a high-speed crash!”

Ashok Elluswamy, vice president of AI software at Tesla, posted on X in response, saying that “the driver manually overrode self-driving by pressing the accelerator all the way to 100% of the accel pedal in this residential area.”

The lawsuit filed in a Harris County, Texas, state court seeks more than $1m in damages, and punitive damages reflecting Tesla’s alleged “reckless disregard for a substantial risk of severe bodily injury”.

The National Highway Traffic Safety Administration (NHTSA) has been investigating the crash.

Since 2016, the NHTSA has opened nearly 50 special investigations of Tesla crashes believed to involve advanced driver assistance systems. About two dozen deaths were reported.

In March, the NHTSA escalated its probe into 3.2 million Teslas equipped with Full Self-Driving, on concern the system may fail to detect or warn drivers in poor visibility. In 2023, Tesla recalled about two million vehicles, nearly all of its electric vehicles on US roads, to better ensure that drivers pay attention when using Autopilot.

Tesla has said Autopilot enables vehicles to steer, accelerate and brake within their lanes, while Full Self-Driving lets vehicles obey traffic signals and change lanes.

The carmaker has also said both technologies require “fully attentive” drivers whose hands are on the wheel.

The incident comes as the Musk-owned company is rolling out robotaxis using automated software in several US cities this year and plans to invite Tesla owners across the country to put their cars into the fleet using the same system.

Tesla is encountering growing resistance in Europe as it seeks approval for its advanced driver assistance system known as Full Self Driving. While chief executive Elon Musk has expressed strong confidence that the technology will soon gain approval across the bloc, internal communications among regulators reveal a far more cautious and skeptical stance.

The system, currently marketed as Full Self Driving Supervised, allows vehicles to operate autonomously under certain conditions but still requires full driver attention. Approval in Europe is critical for Tesla as it attempts to recover market share lost over the past two years and expand its subscription based revenue model.

Early Approval and Wider Ambitions

The Dutch vehicle authority RDW granted initial approval for the system earlier this year. This decision has now been forwarded to the European Union for broader consideration, with discussions underway among member state representatives.

Tesla is aiming not only for approval of its current system but also for future deployment of fully autonomous robotaxis in Europe. Such ambitions depend heavily on regulatory trust in the safety and reliability of its technology.

Regulatory Concerns Across Europe

Despite the Dutch endorsement, regulators from several European countries including Sweden, Finland, Denmark, and Norway have raised serious concerns. These include the system’s tendency to exceed speed limits, its performance in icy and hazardous conditions, and the possibility that drivers may bypass safeguards designed to ensure attentiveness.

Officials have also questioned whether the branding of Full Self Driving could mislead consumers into overestimating the system’s capabilities. This concern reflects a broader issue in the automated driving industry, where terminology can blur the line between assistance and autonomy.

Safety, Environment, and Real World Challenges

European regulators are particularly focused on how the system performs under conditions that differ significantly from those in the United States. Winter driving, for instance, presents unique challenges such as icy roads, reduced visibility, and unpredictable obstacles.

Questions have also been raised about how the system would respond to unexpected hazards, including wildlife on roads. These concerns highlight the difficulty of deploying standardized automated driving technology across diverse geographic and environmental contexts.

Pressure, Perception, and Public Influence

Adding to regulatory unease is Tesla’s approach to public engagement. Officials have expressed frustration with the company’s encouragement of Tesla owners to lobby regulators for approval. In several cases, authorities reported being inundated with emails from supporters advocating for the technology.

While some regulators acknowledged that the system performed well in complex urban environments, others warned that public pressure could complicate an already rigorous evaluation process.

High Stakes Approval Process

For the system to gain EU wide approval, it must secure support from a qualified majority of member states representing a significant portion of the bloc’s population. No immediate vote is scheduled, but further discussions are expected in the coming months.

Approval is seen as a key factor in Tesla’s strategy to boost sales and profitability in Europe, especially as competition intensifies from other global and regional automakers.

Analysis

Tesla’s push for automated driving approval in Europe reveals a fundamental tension between technological ambition and regulatory caution. While the company frames its system as a breakthrough in safety and convenience, European authorities are prioritizing risk mitigation and consumer protection.

The skepticism is not merely bureaucratic hesitation but reflects deeper structural differences in regulatory philosophy. European institutions tend to adopt a precautionary approach, particularly in areas involving public safety and emerging technologies.

For Tesla, the challenge lies in bridging this gap. Securing approval will require not only technical validation but also greater transparency and alignment with regional expectations. For regulators, the task is to balance innovation with responsibility in a rapidly evolving sector.

Ultimately, the outcome of this process will shape not only Tesla’s future in Europe but also the broader trajectory of autonomous driving adoption across the continent.

With information from Reuters.