Magnificent Seven's Stock Market Dominance Fades: Is the AI Trade Over?

• The 'Magnificent Seven' stocks, which previously drove record market highs, are largely in the red this year, with Microsoft down 18% and Amazon/Tesla shedding over 8%.
• Concerns about soaring AI capital expenditures and the ability to meet high earnings growth expectations are causing volatility.
• Free cash flow for major tech companies like Microsoft and Amazon is under strain due to massive AI investments, with some experiencing flat or negative growth.
• Earnings per share growth for Big Tech is at its slowest since Q1 2023, leading to multiple compression and investor skepticism.
• A market rotation towards cyclical areas and away from high-growth tech names is also pressuring the 'Magnificent Seven' stocks.