Investors are questioning the risks of betting big on the Magnificent Seven stocks like Nvidia, Alphabet, and Apple, which dominate the market. Morningstar researchers warn of decreasing diversification and increasing risk. They suggest looking beyond the Mag Seven for opportunities in 2026, like US small caps, healthcare, and international diversification.

With the top 10 US stocks making up 35% of the market, double from a decade ago, market concentration poses risks. Morningstar’s Chief European Market Strategist Michael Field highlights the hidden costs and urges investors to manage the risk by diversifying. Opportunities for 2026 include US small caps, healthcare stocks, and international investments.

Market concentration, reminiscent of the dot-com bubble, raises concerns for investors. Morningstar’s 2026 report emphasizes preparing for potential shocks and navigating market uncertainty. As the Magnificent Seven dominate, opportunities exist in areas like healthcare and international stocks. Diversification is key to mitigating risk and maximizing returns in 2026.

Read more at Morningstar: The Market Is All In on the Magnificent Seven. Where Should Investors Look Next?