2025 is turning out to be an unpleasant year for investors. Both at home, and abroad. The Nifty 50 and Sensex, the two leading barometers of the Indian stock market, are down over 6.5% so far this year.

Indian investors have also been investing abroad, particularly in top US stocks, which are also facing the heat. Nasdaq-100, the tech-heavy index where most of Indian investors’ favourite US stocks are listed, is down by 3.1% YTD.

Here’s an interesting statistic on the number of Indians investing abroad. “Since 2021, annual investment volumes have quadrupled, with over 2.5 million new Indian retail investors entering the space,” said Nikhil Behl, CEO of INDmoney’s Stocks Vertical in an interview to Financial Express Online. Full interview can be read here.

Some of the top US stocks for Indian investors have been Apple, Microsoft, Alphabet (the parent company of Google), Amazon, Nvidia, Meta Platforms, and Tesla. These seven companies are collectively known as the ‘Magnificent Seven’ stocks, which are listed on the Nasdaq 100 and S&P 500 indices. In his interview, Nikhil talked about Nvidia and Tesla being the most bought stocks over the last 18 months by Indian investors.

Big Tech stocks continued their dominance in 2024, a trend that began in the first half of 2023 following the American regional bank crisis. Magnificent Seven’ group of stocks collectively saw a 63% increase in 2024 after rising 75% in 2023.

But, in 2025, there has not been any noteworthy performance of the ‘Magnificent Seven’ stocks. All the stocks except for Meta, which is up by 12%, are in negative territory so far this year. Apple is down by 5%, Microsoft by 8%, Alphabet by 12%, Amazon by 6.5%, Nvidia by 15% and the biggest loser being Tesla, having slumped 30% YTD.

For 2025, many analysts predicted gains of ‘Magnificent Seven’ stocks to be moderate compared to the extraordinary growth of the past two years. Further, the Magnificent Seven’s earnings growth is predicted to drop to 15% in 2025 and since 50% of their revenue originates outside the United States, they are more susceptible to possible retaliatory tariffs.

Indian investors consider buying US stocks not only for diversification but also to participate in the next significant technological and innovation wave. For them, the top tech Nasdaq stocks fit the bill. “Some of the world’s most influential companies like Tesla, Microsoft, and Meta, are leading the charge in AI, cloud computing, and other breakthrough innovations that are set to define the new economy,” said Nikhil Behl in his interview to Financial Express Online.

However, it is time for the Indian investor to expand their US portfolio with other top performing stocks. So far this year, nearly 46% of companies in the S&P 500 are outperforming the index itself. This is in sharp contrast to only ‘Magnificent Seven’ stocks leading the S&P 500 rally in 2024. It shows the broader market is performing and allowing investors to diversify across non-tech US stocks.

Nevertheless, the ‘Magnificent Seven’ stocks are the global market leaders in their space with huge cash reserves and investments in the emerging AI sector. A better approach for investors could be to take exposure in the US stock market through exchange-traded funds that have the mix of tech and non-tech stocks or the index itself.

Diversifying into US stocks might help an Indian investor manage portfolio risks associated with geopolitical and economic uncertainties. With Trump at the helm of US politics, the world appears to be on the verge of a global trade war. Being diversified with exposure to the world’s largest market, America, will be critical in 2025.

Also Read: Elon Musk’s politics and Tesla’s performance: Are they driving the stock down?