Jin Shi Shu Ju·2026-01-07 12:57Core Viewpoint - The dominance of AI companies in the U.S. stock market, which has driven a 78% increase over the past three years, is facing skepticism as investors question the long-term profitability and transformative potential of AI technology [2] Group 1: Market Dynamics - Investors are shifting their focus from the "Magnificent Seven" tech giants to the remaining 493 companies in the S&P 500, particularly those that could benefit from an economic recovery [2] - The "Magnificent Seven" index has seen a decline of 2% since October 29 of the previous year, while the remaining S&P 493 index has increased by 1.8% during the same period [2] - The Defiance Large Cap Ex-Magnificent Seven ETF, which excludes the "Magnificent Seven," has experienced significant net inflows, with December's inflow being four times that of November [3] Group 2: Future Outlook - Ed Yardeni predicts impressive performance for the S&P 493 index in 2025, despite challenges such as government inefficiencies and a weak labor market [3] - If the economy improves, cyclical and growth-oriented sectors are expected to benefit, providing opportunities for investors looking to diversify away from large tech stocks [3] - Goldman Sachs forecasts that the contribution of the "Magnificent Seven" to S&P 500 earnings growth will decrease from 50% in 2025 to 46% in 2026, while S&P 493's earnings growth is expected to accelerate to 9% in 2026 [6] Group 3: Investment Sentiment - There is a growing sentiment of "AI fatigue," with investors becoming more selective about AI-related investments, as evidenced by Michael Burry's bearish bets on Nvidia and Palantir [5] - Concerns about the sustainability of capital expenditures and high valuations are leading to a more cautious approach among AI investors [4] - Analysts suggest that the healthcare sector, along with materials and non-essential consumer goods, may present attractive investment opportunities due to undervaluation relative to historical levels [6]