AI Is Splitting the Magnificent Seven Into Winners and Laggards, Says Lo Toney
AI is splitting the Magnificent Seven into separate camps instead of lifting the group as one trade, Plexo Capital founding managing partner Lo Toney told CNBC's "Squawk Box" this week.
CNBC's Jim Cramer had urged investors days earlier to revisit the group, arguing years of AI spending are starting to pay off. "I think it's time to buy," Cramer said.
The Magnificent Seven's AI Divide
Toney pushed back on treating the seven stocks as one trade again. He said two things now separate them, infrastructure control and the ability to profit from it.
Hyperscalers are cloud giants building massive AI data centers. Toney places Google, Microsoft, and Amazon in this group. They still must prove that spending pays off, a test also facing other Nasdaq stocks that already doubled this year.
Meta and Apple sit in a different category, Toney said. They do not need AI as a standalone business. Instead, they use it to strengthen advertising and hardware franchises they already own.
Tesla is a third case. It is turning AI into physical products and services, a path carrying its own regulatory and profitability questions, Toney said.
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