The S&P 500 ex-Mag 7 & Tech has fallen behind.

S&P 500 margins have risen from approximately 6% in 2002 to approximately 10% today, but tech (ex-Mag 7) has surged from approximately 6% to approximately 14%.

The difference has widened dramatically since 2020.

Tech has maintained consistent expansion for two decades and has recently accelerated.

While the rest of the market faces cost pressures, tech continues to gain operational efficiency.

AI may be amplifying this dynamic: tech companies are scaling revenue with decreasing marginal cost, while traditional sectors face input inflation.