Seven Stocks Are Too Many, Especially When It Comes to AI

The 'Magnificent Seven' stocks are among the most valuable in the market, but owning all seven may not be the best strategic decision. These seven companies - Alphabet (GOOG +0.61%)(GOOGL +0.46%), Apple (AAPL +1.53%), Amazon (AMZN +0.12%), Meta Platforms (META -3.33%), Microsoft (MSFT +3.66%), Nvidia (NVDA +0.22%), and Tesla (TSLA -1.54%) - are all leaders in artificial intelligence, but they also overlap in many areas.

For example, Alphabet has developed its own foundation AI model, while Meta and Alphabet have both created their own AI models. Microsoft, Amazon, and Alphabet all have massive cloud platforms where developers create AI apps that run on various Apple devices. Nvidia makes the chips that drive AI compute power, and Tesla uses AI as the basis of its vehicle operating system.

Having too many of your eggs in one basket exposes you to risk, and owning all seven 'Magnificent Seven' stocks is no exception. In fact, if the technology is undermined, all AI stocks could be negatively impacted at the same time.