Michael Hartnett: I coined “Mag7” - Here’s What Ends Their Run

Hartnett sees AI-driven equity concentration nearing bubble territory, threatened by 5%+ bond yields and 2026 midterm politics, not fundamentals.

• Mag 7 cash-flow flip: Hyperscalers will spend $1.1-1.2 trillion on AI CapEx next year (up from $100bn a few years ago), turning $300bn free cash flow into roughly negative $200bn, making them beholden to bond markets.
• 5% is the line: Hartnett says Treasury officials treat 5% on the 10-year as a 'Maginot line' — spiking yields plus curve inversion signal financial conditions turning too tight for AI CapEx and the wealth effect.

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