Magnificent 7 makes up 31% of SP500 !! WTF were you thinking, SP500?

[Overnight]

C'mon, you should take that as a compliment. After all, you don't often get the honor of being compared to Mr. Schizo.

This a true statement, but I do not like the presentation of the honorific coming from that nick. GAH!! heheh

 

[Zwaen]

Well, as long as things are going smoothly, what's there to complain? But if the AI bubble bursts, this can have a catastrophic effect on the entire market. Those 7 companies, which effectively comprise 1/3 of the index, will drag down the entire economy down the drain.

And to see such a small number of companies wielding so much power over the market is unheard of. Not even during the heyday of the Nasdaq bubble was there so much concentration in just a few stocks. If we don't do anything, it's only a matter of time before this blows up in everyone's face.

I think you are more talking about sector risk. In the S&P7. It doesn’t matter - monopoly risk apart - in how many companies this is dispersed, eg 30 or 7. When money will flow out AI it doesn’t matter that much in how many companies it was located. Even when it is more dispersed, all go down no matter what

 

[Sergio123]

The AI trade right now, in particular NVDA and maybe AMD, is not about the consumer, ie Youtube or search etc. It's about the behind the scenes stuff that it can do on the enterprise side reducing costs, which in time will result in higher margins and eps. NVDA is the anterior face of AI right now, the real payoff will be in many Fortune 500 companies over time. And that's why NVDA is selling all it can make.

The Mag 7 megacap are all consumer facing. Even Nvidia was mostly known for its a graphics cards for gamers. You don't see Snowflake in the Mag 7.

Hopefully AI will be relegated to an eternity of servitude.