This analysis was first published in SvD Näringsliv, in Swedish, on March 5th, 2026. This piece was translated from Swedish by Claude. Some phrasing may differ from a human translation.

How are tech companies really performing on the stock market? SvD’s review shows that someone who invested 100,000 kronor a year ago could today have 91,000 kronor more — or less. And it all comes down to a single question.

The Magnificent 7 is the group of tech companies that has been talked about most on the stock market in recent years. Borrowing its name from a classic western film, these seven tech giants have enjoyed a very strong run on the stock market for several years.

But the Magnificent 7 is not the only part of the tech market that has been performing well. A new SvD review shows that another category has had a substantially better return over the past year.

By comparing different segments of listed tech companies, SvD has established what has developed well — and less well — over the past year.

What emerges is a crocodile gap, where the graphs for the different segments separate so dramatically that they resemble those reptiles. Simply put, one curve points downward and the other upward.

What is the difference between these tech companies?

It is very simple. If you invested in hardware — chips and semiconductors — things have gone extraordinarily well. If you invested in software, you have instead lost a great deal of money. The Magnificent 7, which consists of a combination of hardware and software companies, sits somewhere in the middle.

For our hardware segment, we have selected the ten largest American companies that produce chips and semiconductors. These are familiar names — Nvidia, of course, but also companies like Marvell Technology, Intel, and Broadcom. Together they have risen around 68 percent over the past year.

One might think it is Nvidia pulling the entire segment upward, but that is not the case. We have equally weighted all the stocks so that size does not distort the comparison. There are plenty of individual success stories beyond Nvidia too, such as AMD (+102 percent) or Micron Technology (+355 percent). NXP Semiconductors has, however, had a tougher period, rising just under four percent over the year.

The reason for the hardware boom over the past year is AI. A stronger tailwind for a company producing chips is hard to imagine. The use of AI services drives demand for data centres, and data centres in turn must be filled with hardware.

On the software side, we have looked at the Bessemer Cloud Index, which consists of 64 companies. Over the past year it has fallen around 22 percent — nearly a fifth of its value. Companies like the HR firm Workday, the security company Okta, and the document signing service Docusign have all had weak years. And despite the company C3.ai perhaps having the most topical stock ticker on the market — “$AI” — it has fallen more than 60 percent.

Ironically, the reason software has performed so poorly is likely the same reason hardware has succeeded. It is about AI. On the Bessemer Cloud Index one finds many companies that sell services by subscription — so-called SaaS companies, which stands for “software-as-a-service.”

The fear that these companies will face compressed margins because of AI has been considerable over the year. Some have gone so far as to call it the “SaaSocalypse.” The idea is that companies can easily build their own services with the help of AI, which then leads to price pressure and lost revenues for the SaaS companies.

Finally, there is the Magnificent 7. In any other context, their performance would still look very strong. Over the year they have risen almost 30 percent on the stock market. And this from an extraordinarily high starting point. All seven — Nvidia, Apple, Alphabet (Google), Microsoft, Amazon, Meta, and Tesla — are valued at over 1,000 billion dollars. Nvidia is the largest, valued at almost 4,500 billion dollars.

In summary, someone who invested 100,000 kronor in tech stocks a year ago has experienced very different outcomes depending on their choice.

If you chose the Magnificent 7, you would have 129,000 kronor today.

If you chose the chip companies, the equivalent figure is a full 169,000 kronor.

And if you chose the worst in the tech class — software companies — you would have only 78,000 kronor left.

Stock prices were taken on 3 March and have been rounded for clarity. All companies within each segment are equally weighted, indexed at 100 one year prior.