As the AI trend continues to push the major indices higher, concerns about overextension amid record-high valuations should have some investors considering whether to lock in gains on high-flying stocks. This year, the two top-performing sectors—tech and communication services—have posted gains of roughly 17% and 21%, respectively. Unsurprisingly, both are heavily leveraged to AI and are home to five Magnificent Seven stocks.
And while this isn’t an argument for liquidating your AI stocks, shining a light on some of the elevated price-to-earnings (P/E) ratios and questionable financials of these companies can help you decide if now is the appropriate time to scale out of the following stocks.
