Big Tech's Magnificent Seven Massively Outpace Markets Despite Overheating Valuations, Warning Sign for Investors
• The "Magnificent Seven" tech stocks (Microsoft, Apple, Amazon, Tesla, Alphabet, Nvidia, Meta) have massively outperformed the broader market over the past year
• This performance gap between big tech and smaller stocks is highly unusual historically and likely unsustainable long-term
• Investors have piled into big tech due to reliability, growth prospects, and upcoming Fed rate cuts
• Valuations for the "Magnificent Seven" have become extremely inflated relative to future earnings
• Investors should rebalance portfolios to avoid overconcentration in big tech and recognize winners likely won't repeat