Non-Mega-Cap S&P 500 Profit Growth Stalls, Posing Valuation Risk for Tech Giants

According to Apollo Global Management chief economist Torsten Slok, companies outside the Magnificent Seven are failing to demonstrate profitability gains from artificial intelligence spending, presenting valuation risks for large technology stocks. "We need to see profit margins rising in the remaining 493 S&P 500 constituents," Slok said, adding that the performance of these non-mega-cap stocks has become "very, very critical." Without positive earnings and margin expansion results from AI adoption in these companies, investors' valuation concerns about major tech stocks could deepen, Bloomberg Television reported.
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