Bloomberg Surveillance · Tuesday, July 7, 2026
Torsten of Apollo highlights a critical disconnect: while profit margins have been strong in the 'Magnificent Seven' companies, they have not grown outside this group, particularly in the S&P 493. The time it takes for AI investments to yield ROI is a key question, impacting the valuations of these major tech companies.
“Apollo noting a lack of profit margin gains due to AI outside of the tech sector. Torsten's slock of Apollo, writing, there's a mismatch between current earnings expectations and the actual time firms need to generate ROI on AI investments, and it could have significant implications for many AI company valuations.”
“But what really is critical is that now we need to see profit margers grow up outside the Magnificent seven. In other words, what's going on with this in p. four ninety three becomes very very critical because at this point profit manders is a P. Four ninety three have just not gone up.”
“Because if there's a P four ninety three, let's say that it takes several years before profit margins begin to go up. The question is whether the implicit earnings assumptions in the Magnificent seven are too high or too fast relative to what's actually going to happen.”