The sharp AI-led rally on Wall Street appears to be losing steam as investors grow wary of heavy capital spending, stretched valuations and rising concentration risks. The Magnificent 7 — Apple, Microsoft, Amazon, Alphabet, Meta, NVIDIA and Tesla — now make up 37% of the S&P 500, raising concern that the market has become too dependent on a handful of mega-cap technology stocks.

Over the past week, sentiment around artificial intelligence has clearly turned. The trigger: Big Tech’s plans to collectively spend nearly $400 billion this year on AI infrastructure, prompting questions about sustainability and returns.

Capex Surge Raises Questions About AI Economics

Microsoft set the tone last week when it disclosed $34.9 billion in quarterly capital expenditure, with almost half funnelled in

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