Investors are pulling back from large artificial intelligence stocks due to concerns over valuation and excessive AI infrastructure spending. The market is uncertain about how AI stocks will perform in 2026, with questions about winners continuing to win or facing a potential pullback.

Only two stocks in the elite “Magnificent Seven” outperformed the S&P 500 index in 2025, with gains at least doubling the market’s performance. Alphabet emerged as a value stock, facing challenges from a U.S. Department of Justice lawsuit and threats from AI chatbots like ChatGPT.

Nvidia faced geopolitical concerns affecting its business, but continued to report strong earnings growth. The company may reopen its China business soon, but faces competition from hyperscalers building their own chips and custom chips gaining traction.

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Read more at Nasdaq: Only 2 “Magnificent Seven” Stocks Beat the S&P 500 Index in 2025. Should You Buy Them in 2026?