Skip to navigationSkip to main contentSkip to right columnADVERTISEMENTMoz FarooqueSun, August 9, 2026 at 5:07 AM GMT+2 6 min readThe 'Magnificent Seven' stocks spent years convincing investors that their tremendous AI spending would translate into sustainable growth, powerful cash flows, and fatter valuations.That assumption is now up against a major test.Wall Street has largely treated hyperscaler spending as a powerful long-term growth engine, but Bank of America strategist Michael Hartnett just flagged a major risk that could test how much investors are willing to pay for the AI trade.The contrast is becoming incredibly tough to ignore. Stock markets remain somewhat resilient, but parts of the credit market are flashing more caution around AI spending. That said, BofA now sees one major market signal as critical to the Mag 7's ability to shrug off that threat.Bank of America warns cheaper Chinese compute could challenge Magnificent Seven stocksAnnabelle Chih/Bloomberg via Getty ImagesAccording to Seeking Alpha reporting, Hartnett just identified what needs to keep working for the AI trade to remain credible.More AI: