AI and The Magnificent 7
New Pardigm ?
As billions of dollars continue to flow into the AI sector, some companies will likely become long-term winners, while others may eventually be left behind.
As portfolio managers, our job is to look beyond the excitement and assess which businesses have the strongest chance of benefiting over time. That is not easy, and we will not get every call right.
The goal is to stay disciplined, weigh the evidence carefully, and build portfolios where the odds of owning future winners are meaningfully improved.
Some of the next AI winners may not be the same stocks that drove much of the market’s gains over the past few years.
In recent years, a small group of large technology companies, often referred to as the “Magnificent 7,” have had an outsized impact on market returns. This group includes Microsoft, Apple, Amazon, Meta, Alphabet, Tesla, and Nvidia.
Looking ahead, earnings growth for this group is expected to slow from very high levels. At the same time, earnings growth for the other 493 companies in the S&P 500 is expected to improve. The chart below highlights this shift.
Within that broader group of companies, there may be new market leaders that are not yet obvious today.
Our job is to look for those opportunities before they become widely recognized. Part of that work is understanding the “why”: the company’s fundamentals, such as earnings growth, margins, competitive position, and balance sheet strength.
The other part is the “when”: watching investor flows, price trends, and momentum as the rest of the market begins to recognize the opportunity.
In simple terms, we are looking for strong businesses where the fundamentals are improving and market momentum is starting to build.
Source Hedgeye Risk Management - Retrieved April 8, 2026
The table below reflects trend signals published by Hedgeye Risk Management as of June 17, 2026.
These signals are one input among many considered by our investment team and may not align with positioning in any client portfolio. Individual securities and commodities referenced may not be suitable for any particular investor. Clients should not act on this information without consulting their portfolio manager.
Tactical Trend Changes📈
Technical trends are analytical observations and do not guarantee future results
Consumer Staples………..Bullish to Neutral
Copper Commodity…….. Bullish to Neutral
Gold Commodity…………Neutral to Bearish
Germany,,,,,,,,,,,,,,,,,,,,,,,,,,Neutral to Bullish
Source Hedgeye Risk Management - retrieved June 24, 2026
Bullish: a view that the price of a security or market may rise, subject to significant uncertainty and risk of loss.Bearish: a view that the price may fall, subject to significant uncertainty and risk of loss.Neutral: a view that the price may remain relatively stable. These terms reflect third-party and/or general market views and are not recommendations or predictions.