If an AI Bubble Forms and Pops, the Mag 7 Won't All React the Same Way

The article argues that an AI-driven bubble could be concentrated in semiconductor stocks rather than across all big tech, so a pullback in overheated chip names need not topple the Magnificent Seven. VanEck’s SMH has surged roughly 55% year-to-date (about 30% in a month), raising bubble-risk concerns for semiconductors after parabolic moves. By contrast, several Magnificent Seven members — notably Meta — look reasonably valued: Meta’s forward P/E recently fell to about 19.5 and the company plans heavy AI-related CapEx (up to $145 billion). The author suggests investors consider sticking to modest valuations and possibly overweighting select Magnificent Seven names that offer relative value, while being cautious about richly priced semiconductor names.