By Namrata Sen
Publication Date: 2026-02-23 11:11:00
As ‘Magnificent Seven’ stocks experience a downturn amid concerns over escalating investments in data centers and high earnings growth expectations, analysts see a shift into “cyclical areas” of the market.
AI Rally Broadens Beyond Mega Caps
Stephanie Link, chief investment strategist at Hightower Advisors, told CNBC that the AI rally is broadening and that investors don’t have to own just those mega-cap stocks because other companies are also poised to benefit and “will win.”
Besides Link, Melius Research analyst Ben Reitzes noted that the slide in Big Tech comes as the group’s AI investments have benefited a range of downstream AI players, like data center builders, power-generating companies, and energy infrastructure names.
Glen Smith of GDS Wealth Management said the Mag 7 stocks are struggling in 2026 simply because they are “exhausted.” While he emphasized they remain “incredible” companies and stocks, he added that at some point, “a breather is needed.”
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