Bank of America flags a new risk for the Magnificent Seven stocks

Bank of America drew investor attention to a new risk factor for the Magnificent Seven group of stocks — America's largest tech companies, including chipmakers and AI platform developers. According to the bank's analysts, growing divergence in earnings growth and valuations within the group itself could push the market toward a more selective approach to individual names rather than treating the group as a monolith. This means the old strategy of blindly betting on all seven names may become less effective. Investors are advised to scrutinize each company's fundamentals more carefully. The shift is particularly relevant amid the ongoing boom in AI-related capital spending.