The Meh Seven

There's a reason they don't call it the S&P 7.

After spending the first half of the year betting big on the so-called Magnificent Seven tech firms — that's Amazon, Apple, Microsoft, Google, Nvidia, Meta, and Tesla — traders are finally shifting gears. In fact, the S&P 500 has largely clawed back all of the losses from the early August mass sell-off, and it's thanks almost entirely to the 493 non-Big Tech firms on the index, according to a Bloomberg analysis of market data published over the weekend.

Techtonic Shifts

As for the formerly magnificent ones, they're more like the Meh Seven. Heavy spending on artificial intelligence and its infrastructure has eaten into tech earnings — relatively speaking. In the second quarter, the Magnificent Seven collectively saw profit growth of just 36%, down from 50% in the previous three quarters. Meanwhile, an ongoing regulatory crackdown has bedeviled Big Tech. The biggest target as of late has been Google, which finds itself in the midst of two high-profile antitrust cases: One alleging monopolistic abuse of the ad-tech industry kicked off last week, and another from earlier this summer already found monopolistic abuse in the search industry.

That's led many traders on Wall Street to rotate into sectors now in the far-more mouthwatering life cycle stage of transitioning from earnings declines to earnings gains:

• Since the S&P 500 reached a 2024 peak on July 16, the Magnificent Seven have collectively slipped over 5%, according to Bloomberg's index of the cohort, while the S&P overall has declined just 1%. Utilities and real estate stocks in particular have buttressed the index, both rising 11%.
• Traders on Wall Street are now pricing in the regulatory risks for Google parent Alphabet, down about 14% since the start of the third quarter. The tech giant is trading at roughly 19 times forward earnings, a discount compared to the rest of the S&P 500, per a recent Wall Street Journal analysis of FactSet data.

Maybe better Wi-Fi will curtail the spread of sky-rage on planes.

United Airlines announced on Friday that it's struck a deal with SpaceX's satellite internet service, Starlink, to beam Wi-Fi down into its planes while they're in flight. Starlink already had a handful of airlines in its stable, but partnering with United is a big step toward cementing itself as a go-to internet provider for the transportation sector.

When You Wish Upon a Star

Historically, satellite internet companies have had a hard time turning a profit. In the early 2000s, numerous satellite internet firms went bankrupt, so figuring out how to make Starlink a commercially viable wing of SpaceX's operation has been a big, looming question mark. SpaceX is a private company, so we can't know for certain how much money Starlink is making versus how much cash it's burning up on re-entry, but in May analysts at market research firm Quilty Space reported that they believe Starlink will pull in $6.6 billion in revenue this year, which would make it much larger than its next-biggest rivals.

While Starlink is available to individual consumers, it's made great strides in nabbing defense contracts and transportation partnerships:

• Starlink's first big airline contract came in 2022, when it struck a deal to provide in-flight Wi-Fi to Hawaiian Airlines. It also struck a deal with charter jet service JSX in 2023, and has scored a few wins internationally with Qatar Airways and Air New Zealand. 
• By revenue, United is the biggest airline Starlink has scored a partnership with to date. It could be a little while till you can actually log on mid-flight though — Hawaiian Airlines only started rolling out Starlink Wi-Fi in February.

Moonshots are not horseshoes, so close doesn't count.

A Tokyo-based firm that came within 5 kilometers of being the first private company to land a probe on the moon, only to crash on the cusp of triumph, plans to launch a second attempt later this year with a new record in mind.

Moon-as-a-Service

After its Mission 1 lunar probe, launched in December 2022, ran out of fuel and crashed, Japanese lunar transportation startup ispace lost the chance to be the first private firm to touch down on Earth's only natural satellite. A US firm, Intuitive Machines, landed a probe in February 2024. 

But the Tokyo-based company is giving it another (moon)shot. For Mission 2, scheduled to launch as early as December, the company told Nikkei it found and fixed software problems, and still plans to achieve a first:

• ispace's Mission 2 probe vehicle, nicknamed Tenacious, will take pictures and collect samples of lunar regolith, the unconsolidated material on the moon's surface that, along with rock chips and volcanic glass, contains a special component called "agglutinates" — basically mineral fragments held together with glass, found only on the moon.
• ispace signed a contract to sell the regolith to NASA. If the transaction goes through, it will be the first-ever commercial transaction of lunar resources.