This Fund Manager Says You Should Get Out of Tesla and Apple—Now
If you currently hold Tesla (NASDAQ: TSLA) and Apple (NASDAQ: APPL)—two popular Magnificent Seven stocks—you might want to consider rotating out of them and into Broadcom (NASDAQ: AVGO) and Oracle (NYSE: ORCL) instead.
This advice comes from Vimal Patel, Co‑Portfolio Manager of the Columbia Seligman Global Technology Fund (SHGTX), whose mutual fund has outperformed its tech-sector peers by 6% over the past five years.
Tech stocks are navigating a volatile 2025 landscape marked by geopolitical tension, softening consumer demand, and tariff uncertainty. Patel believes that while the Magnificent Seven mega-cap tech stocks have dominated headlines, some are losing momentum in the current environment.
He argues that Apple and Tesla are particularly exposed to those risks and face headwinds that could cap future growth, while Broadcom and Oracle are capitalizing on transformative trends like artificial intelligence (AI), chip customization, and enterprise cloud computing.
So, is this a good idea? Let's take a closer look.
Tesla: China Competition Is a Big Issue
SHGTX doesn’t own any shares of TSLA, and that’s by design (the fund doesn't currently own any Mag 7 stocks).
Patel sees Tesla’s first-mover advantage eroding as new competition emerges, particularly from China’s BYD (OTCMKTS: BYDDY) and NIO (NYSE: NIO). Legacy automakers like BMW (ETR: BMW), Volkswagen (ETR: VOW3), and General Motors (NYSE: GM) are also accelerating electric vehicle (EV) production, sparking a global price war and threatening Tesla’s position at the top of the EV food chain.
Tesla’s stock is no longer supported by clear leadership or sustainable margins, according to Patel, and he is skeptical of Musk's longer-term plays in robotics and autonomous driving.
Apple: Weary iPhone Users Could Weigh On Share Growth
Apple comprises 3.4% of the Columbia Seligman Global Technology Fund, with over 407,000 shares owned, valued at $81.7 million.
Still, Patel advises shedding the stock, citing a stagnant iPhone product line, a sketchy AI strategy, and supply chain vulnerabilities tied to the company’s China partnership, which the ongoing tariff wars could negatively impact.
Apple shares are down 16.9% so far in 2025, although the stock has rebounded 22% since mid-April. Patel is on target with the iPhone issue, which has contributed to AAPL’s declining market share value.
"Our Key First Look Data reflects weaker iPhone sales at -6% y/y, with sell-through below normal seasonal trends (m/m) due to pull ins from tariff-related pricing concerns the last two months and generally weaker iPhone demand," KeyBanc analyst John Vinh wrote in a new research note.
On the upside, Apple is seeing 12% growth in its App Store after a tariff-based slow growth period, with 18% growth in the US against a 10% rise globally (non-US), according to YBS analyst David Vogt, who recently popped a $210 price target on AAPL shares, right about the stock’s current price.
Broadcom: Chip Customization Could Boost Stock Price
Broadcom earns pluses from Patel for its design of in-demand hyperscaling silicon microchips, such as those used by tech heavyweights like Amazon (NASDAQ: AMZN) and Microsoft (NASDAQ: MSFT).
These application-specific integrated circuits (ASICs) are optimized for AI training and inference tasks, making them more efficient and cost-effective than general-purpose chips. This puts Broadcom in a semiconductor sweet spot, supplying the infrastructure behind the most compute-intensive AI workloads.
The numbers back it up: Broadcom shares have surged 76% over the past three months. The company sports a robust balance sheet, a lucrative partner base, ample free cash flow, and a growing number of data center customers, which comprise the bulk of AVGO’s $65 billion in anticipated sales revenue in 2025. Additionally, Broadcom’s expected earnings per share should rise $25% annually through 2027.
Analysts have given the stock a consensus Buy rating and raised their price targets recently, reflecting confidence in the chipmaker’s AI positioning and robust financials.
Oracle: New Cloud Partnerships a Boon to Shareholders
Oracle is another high riser in mid-2025, with its share price up 90% over the past three months and up 38.8% year-to-date.
The company should sustain that growth after a new batch of cloud service software agreements was rolled out in the past week, which are expected to yield over $30 billion by 2028.
Oracle is a key partner (along with SoftBank Group (OTCMKTS: SFTBY) and OpenAI) in the AI data center consortium rolled out by the White House as part of the Stargate Project, a $500 billion government-business initiative that the Trump administration calls the “largest AI infrastructure in history.”
Oracle should also benefit from the passage of the recently enacted “Big Beautiful Budget Bill,” mainly due to tax savings considerations included in the bill that favor software companies in key spending areas, such as research and development and operations management.
Analysts tracked by Marketbeat have given Oracle a Moderate Buy and a consensus target price of $211. The stock also comes with a modest 0.86% dividend yield.
So, Should You Heed Patel's Advice?
To be clear, Patel isn’t trying to rewrite what stocks make up the Magnificent Seven. What he is doing is sending a message to investors: just because a stock has been dominant historically doesn’t mean it’s still the best choice.
His recommendation to get out of Tesla and Apple and get into Broadcom and Oracle reflects a deeper shift in the future tech growth and where its coming from. For investors looking to align their portfolios with the next wave of tech innovation, one that will be driven by artificial intelligence, purpose-built chips, and enterprise cloud infrastructure, Patel’s strategy offers a compelling case. But ultimately, it is up to individual investors and their risk tolerance to decide what's best for them and their portfolios.
Learn more about SFTBY
