S&P 500 closes at record high

Core Viewpoint - The market is currently experiencing a positive trend driven by AI stocks, with the S&P 500 reaching a record high, but there are opportunities beyond the well-known "Mag 7" stocks for 2026 [1][2]. Group 1: Investment Opportunities - There is a belief that diversifying investments outside of the crowded trades represented by the Mag 7 is not only safe but also a smart strategy for future growth [2][3]. - Companies like Photronics, which are related to AI but not part of the mainstream AI stocks, have been highlighted as potential investment opportunities [3]. - Google is identified as a standout within the Mag 7 due to its ownership of its cloud infrastructure, AI capabilities, and strong cash flow generation, making it a likely winner in the future [5][6]. Group 2: Market Dynamics - The current market is characterized by concentrated trades, and many stocks have been assigned valuations that may not be justified by their competitive advantages compared to firms like Google [7]. - There is speculation about the existence of an AI bubble, but it is suggested that major corrections may be less likely due to political and regulatory factors that favor maintaining high liquidity in the market [9]. - The concept of "microbubbles" is introduced, indicating that while some stocks may be overvalued, the overall market may not experience a significant downturn, but rather a more discerning approach to valuations [10]. Group 3: Company Performance - Google has seen a 62% increase in stock price over the past year, supported by advancements like the new Gemini model and investments from Berkshire Hathaway [7]. - Oracle is mentioned as a potential loser in the current market due to its inability to generate cash flows comparable to Google, which may hinder its competitiveness in the AI space [11][12]. - The high level of spending in the tech sector means that only a few companies will be able to sustain their positions, with those unable to keep up, like Oracle, likely to struggle in 2026 [12].