This MAG 7 bifurcation tells a clear story about 2025's market narrative

The narrative of the stock market is shifting as we head into 2026. For years, the "Magnificent 7" traded largely as a monolith—when tech went up, they all went up. But late 2025 has revealed a stark bifurcation, a split between the AI infrastructure winners and the consumer/cloud laggards.

For the modern trader, this divergence is not a warning sign to flee the market, but a signal to adapt. It creates distinct opportunity sets for those utilizing AI investment advice to refine their options trading strategies.

At Stonki, an SEC Registered Investment Advisor, we believe in empowering you with data-driven, non-discretionary advice. We don't trade for you; we provide the personalized trading plans and AI-powered options recommendations you need to execute with confidence in your own brokerage account.

The Great Divergence: Infrastructure vs. Consumer

The data from late 2025 tells a clear story: capital is rotating based on pure AI execution.

The Winners: AI Infrastructure Acceleration

Momentum remains strong here, driven by cloud acceleration and chip demand.

• GOOGL (+63%): The standout performer, up 25% in the last 3 months alone. Currently trading around $314.77, Google has successfully integrated AI across its stack.
• AVGO (+47%): Broadcom's custom chip business is thriving. While it has cooled recently (up only 2.8% in the last 3 months), it sits at $350.06.
• NVDA (+32%): The AI kingpin at $188.64. While up 5.3% in the last quarter, it has consolidated from highs near $212.

The Laggards: Cloud & Consumer Concerns

Conversely, companies facing monetization questions or consumer softness have struggled.

• MSFT (+15%): Down 4.6% over 3 months ($486.64) amid Azure competition.
• META (+10%): Down a significant 12.2% over 3 months ($664.42) due to Reality Labs burn and regulatory pressure.
• AAPL (+11%) & AMZN (+4%): Both are underperforming relative to the leaders, with Amazon showing the weakest yearly performance.

How to Trade This Divergence with AI Options Advice

This split creates two distinct environments: Momentum Continuation (for the winners) and Mean Reversion (for the laggards). Here is how Stonki's AI investment analysis can help you structure personalized options trading plans for Q1 2026.

1. Income Strategies for the "Winners"

When stocks like GOOGL or NVDA have run up significantly, buying straight calls becomes expensive and risky due to potential exhaustion. Instead, selling options for income can be a prudent approach.

• Covered Call Strategy: If you own the underlying stock, our AI might recommend selling out-of-the-money calls. This allows you to collect premium while the stock consolidates.
• The Greeks: We monitor Delta to ensure you aren't capping your upside too aggressively, and Theta to maximize the decay of the option you sold.

Stonki Insight: If NVDA struggles to reclaim $200 before its Feb 25 earnings, an AI covered call recommendation could help generate yield on a stagnant position.

2. Mean Reversion for the "Laggards"

MSFT and META are quality names that have been beaten down. If they show technical stabilization, they may be candidates for mean reversion—betting they will bounce back.

• Credit Spreads (Bull Put Spreads): Rather than trying to catch a falling knife by buying stock, you might consider selling vertical spreads. This is a defined risk options strategy where you profit if the stock stays above a certain level.
• Risk Management: Stonki's AI options Greeks monitoring helps you select strikes that offer a high probability of profit while keeping your risk defined.

Q1 2026 Catalysts: The Earnings Watchlist

Volatility breeds opportunity, but it also demands caution. As an SEC registered investment advisor, we emphasize planning around key events. Stonki monitors these dates to alert you to potential volatility spikes:

• Jan 29: AAPL & AMZN earnings (Value traps or turnaround candidates?)
• Feb 3: GOOGL earnings (Watch for exhaustion)
• Feb 4: MSFT & META earnings (Look for guidance shifts)
• Feb 25-26: NVDA & AVGO earnings (The AI infrastructure test)

Managing Risk in a Bifurcated Market

Whether you are interested in 0DTE options trading (zero days to expiration) or long-term wheel strategy setups, risk management is paramount. Stonki does not execute trades, which puts the power—and the responsibility—in your hands. However, we support you by:

1. Monitoring Portfolios: We track your positions and send alerts if unusual options activity or technical breakdowns occur.
2. Position Sizing Guidance: Our AI advises on appropriate allocation sizes so that no single earnings miss destroys your portfolio.
3. Scenario Analysis: We analyze market conditions to suggest when to be aggressive and when to hedge.

Conclusion: Build Your Plan with Stonki

The market isn't moving in unison, and your strategy shouldn't be one-size-fits-all. Whether you are looking for AI wheel strategy advice, options income strategies, or simple stock monitoring, Stonki provides the intelligence you need to make smarter decisions.

Ready to navigate the 2026 divergence? Let Stonki analyze the data, monitor the Greeks, and build a personalized trading plan tailored to your financial goals.

Disclaimer: Stonki is an SEC Registered Investment Advisor. All investments involve risk, including the loss of principal. Options trading is not suitable for all investors. Stonki provides non-discretionary advice and does not execute trades or manage client funds directly.