Growth prospects for the group of companies dubbed the Magnificent 7 are still above average, but they’re no longer magnificent. Consensus Wall Street forecasts suggest that, in aggregate, the seven large-capitalization companies will perform just a whisker better than the “S&P 493” next year, and yet investors continue to pay a premium to own them. That alone suggests it may be time to dial back their weightings in portfolios.

Consider that the group’s net income growth is expected to ping pong around 20% from here on out, according to projections compiled by Bloomberg Intelligence. The other members of the S&P 500 Index are expected to see growth climb toward 16% by the end of next year. The issue is that the Mag 7 grouping trades at a median valuation of about 30 times blended forward earnings, while the other large-cap stocks in the S&P 500 Index trade at a median of 19.5 times. How long should we expect investors to overpay for increasingly similar performance?

To a large degree, the next two years will depend on what happens with artificial intelligence and whether the hype around its potential to disrupt the way we do business is sustained. Nvidia Corp. has become the world’s most exciting stock by providing the proverbial picks and shovels for the early days of the AI boom. Apple Inc., Microsoft Corp., Amazon.com Inc., Meta Platforms Inc. and Alphabet Inc. have all gotten in on the excitement by investing heavily in bringing the technology to companies and consumers, in many cases sending their capital expenditures directly into Nvidia’s coffers. The companies have all become codependent and correlated, and their high valuations hinge on the idea that the merry-go-round will keep spinning. (More on odd-man-out Tesla Inc. later.)

Some people say it might be slowing down already. While generative AI models continue to dazzle, they’re also plagued by mistakes and imperfections, and the marginal improvement for additional dollars and data isn’t quite what it used to be. Conceivably, AI may follow the path of the internet and other innovations described in the Gartner hype cycle: Early successes and big dreams give way to a subsequent period of disillusionment and even some business failures before a more sustainable revolution can ultimately take hold. In the dot-com bubble, for instance, Amazon.com emerged triumphant from the ashes of so many other e-commerce companies.

High expectations may also collide with other threats to the tech and communications behemoths. Alphabet shares tumbled last week after the Department of Justice revealed it would try to make the company sell its Chrome browser. Apple, which has faced its own antitrust scrutiny, is also contending with challenging iPhone sales in China and the threat that President-elect Donald Trump will launch a new trade war that could hobble its supply chain.

Tesla, I will acknowledge, is a trade unto itself that isn’t directly related to its Mag 7 peers. Lately, it’s been trading not on extraordinary earnings growth but on the promise of robotaxis that don’t yet exist in the market and Chief Executive Officer Elon Musk’s cozy relationship with Trump (which may just help him clear regulatory hurdles to Tesla’s autonomous driving ambitions). At 108 times forward earnings, Tesla is both the riskiest investment in the Mag 7 basket and possibly the only true diversifier.

No doubt, these companies all offer a lot to be excited about, too, and many investors will conclude that the upside-surprise potential is too great to miss out on completely.

Indeed, 2024 itself has panned out far better than analysts envisioned some 12 months ago. But it would also be logical for investors to take some profits in those companies, much as Warren Buffett, the investor know as the “Oracle of Omaha,” has been doing with his stake in Apple. At present, the companies constitute nearly one-third of the S&P 500 by weighting—and by extension a bloated portion of many Americans’ retirement savings. That feels like a bit too much of your future to trust to a group of richly priced companies all leveraged to the same narrative.

Jonathan Levin is a columnist focused on U.S. markets and economics. Previously, he worked as a Bloomberg journalist in the U.S., Brazil and Mexico. He is a CFA charterholder.