The S&P 500 has become “extremely concentrated,” with the top 10 stocks contributing 54% of the market returns since January 2021, Apollo chief economist Torsten Sløk said in a Friday blog post. With the cluster of tech stocks at the top beginning to unravel, he is pouring cold water on continued aggressive investment in the index and in the Magnificent Seven.

“The textbook idea that the S&P 500 gives you a diversified exposure to risk is just simply no longer the case,” Sløk told Fortune. “You are very focused and concentrated in a small group of names, in particular in tech, making up such a significant share of your overall risk exposure.”

The top 10 companies in the S&P 500 now prop up 40% of the index’s market capitalization—more than 30% of which is from the Mag Seven—meaning the fortune of the markets has become increasingly reliant on investors’ optimism in AI. Alphabet’s AI rally not only helped mint CEO Sundar Pichai as a billionaire, for example, but the Google parent’s earnings beat gave the S&P 500 its fourth consecutive record close on Thursday.

But as the AI bubble swells larger than that of the IT bubble a quarter century ago, as Sløk has previously noted, the extreme hype around the technology risks creating even broader economic consequences than the dot-com crisis. To protect one’s individual investments, now is the time to reconsider pouring money into the Mag Seven, Sløk argued.

“One should have some exposure to the S&P 500 and should certainly also have some exposure to AI,” Sløk said. “But it’s very clear that [due to] the market’s extreme focus and concentration on this story, this is the time to have a conversation around, What are the things I should be doing with my money?”

The Magnificent Seven becomes Six, becomes Five

Mounting concerns about the ramifications of a growing AI bubble coincide with the unraveling of the Magnificent Seven stocks.

“We’re beginning to have conversations about the ‘Magnificent Six’, maybe it’s only five,” Sløk said. “This is also just telling you that the Magnificent Seven are seven very, very different companies that have very different businesses.”

Popularized in 2023 by Bank of America analyst Michael Hartnett, the “Magnificent Seven” was meant to bunch together a group of companies alike in their goal of pushing toward an AI future, but the tech firms once in lockstep are beginning to diverge in their levels of success and areas of investment. 

Apple, for example, has lagged behind competitors like Microsoft and Meta in developing AI products and services. With its stock down about 12% year-to-date, some market watchers have called for CEO Tim Cook to step down from the company, despite Cook boosting the company’s stock price by nearly 1,500% over the past decade-plus. 

Tesla has likewise failed to deliver on promises to autonomous driving, continuing this week its streak of sales misses and disappointing quarters. Tesla’s stock has fallen nearly 15% in 2025 as investors’ confidence in CEO Elon Musk continues to be tested.

Meanwhile, Nvidia this month became the first publicly traded company with a more than $4 trillion valuation as its stock price surged by approximately 1,460% over the past five years. The company expected to continue strong sales growth, despite increasing competitive pressures.

Ahead of next week’s earnings reports for Meta, Apple, and Microsoft, analysts are continuing to scrutinize the pricing of these companies’ stocks, assessing if there are other options in the tech sector worth buying into.

“AI will continue to have a dramatic impact on all our lives,” Sløk wrote in his blog post. “But the question remains whether the Magnificent Seven are correctly priced, and if they will even be the best AI investments over the next five to ten years.”