The Magnificent Seven stocks (Apple, Amazon, Alphabet, Microsoft, Meta, Nvidia, and Tesla) show signs of potential bubble territory but aren't definitively in one yet. Analysts note their valuations are elevated but justified by strong earnings growth, with a current average P/E ratio of 29x compared to 16x for the broader S&P 500. Ray Dalio's "bubble indicator" suggests a neutral market sentiment at the 52nd percentile, indicating no immediate bubble risk. However, caution is advised due to high concentration and potential corrections if growth expectations falter.
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