Yardeni Research data put the Magnificent Seven at 31% of the S&P 500’s value, versus just under 26% of expected earnings over the next four quarters. The article warns that high valuations and AI firms’ interdependence could weigh on the index if earnings forecasts fall short.
The seven are Apple, Amazon, Alphabet, Meta Platforms, Microsoft, Nvidia and Tesla, just 1.4% of the index’s 500 companies. Yardeni data put their average forward P/E at 23, versus 17.3 for the other stocks; since September 2022’s low, the seven’s average value roughly quadrupled while a typical other constituent gained a little over 80%. The article attributes Tesla’s rise instead to electric-vehicle adoption.
Microsoft, for example, supplies cloud-based AI servers to OpenAI and owns a stake in it; OpenAI buys server access from CoreWeave and also owns part of that provider. Goldman Sachs believes AI-industry spending on infrastructure, hardware and related services is on pace to exceed $1 trillion in 2026, at least as much in 2027 and again in 2028. The article says it is too soon to panic, while cautioning that AI returns may fall short of initial forecasts.
