Apollo: Investors face growing risk from overexposed AI concentration

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Apollo Global Management is warning that U.S. equity markets are leaning dangerously on a narrow set of technology giants tied to artificial intelligence (AI), raising concerns about the sustainability of the current market rally.

Torsten Slok, the firm’s chief economist, said investors remain heavily concentrated in the Magnificent Seven group of Apple (AAPL [https://seekingalpha.com/symbol/AAPL]), Alphabet (GOOG [https://seekingalpha.com/symbol/GOOG])(GOOGL [https://seekingalpha.com/symbol/GOOGL]), Amazon (AMZN [https://seekingalpha.com/symbol/AMZN]), Meta Platforms (META [https://seekingalpha.com/symbol/META]), Microsoft (MSFT [https://seekingalpha.com/symbol/MSFT]), Nvidia (NVDA [https://seekingalpha.com/symbol/NVDA]), and Tesla (TSLA [https://seekingalpha.com/symbol/TSLA]), which have driven nearly all of the upward revisions to 2026 earnings forecasts for the S&P 500 (SP500 [https://seekingalpha.com/symbol/SP500]) since Liberation Day.

Outside of these AI-linked leaders, earnings expectations for the remaining 493 companies in the index have stayed muted, underscoring a widening gap between tech optimism and the broader corporate outlook.

Slok cautioned that this imbalance highlights two critical risks: First, that market performance is increasingly dependent on a small group of firms, and second, that the broader economy is not experiencing the same earnings momentum.

“The bottom line is once again that there is an extreme degree of concentration in the S&P 500, and equity investors are dramatically overexposed to AI,” Slok said.

The warning echoes a growing debate on Wall Street over whether enthusiasm for artificial intelligence has created a structural imbalance. For now, market resilience appears tied to a handful of stocks—a dynamic that could amplify volatility if the AI trade falters.

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