Investors used to talk about the magnificent seven as though they were one stock, but they’re increasingly behaving like seven companies again.For a long time, buying almost any member of the group – Apple, Alphabet, Amazon, Meta, Microsoft, Nvidia and Tesla – amounted to the same bet, namely that artificial intelligence would fuel years of spectacular earnings growth. The seven stocks “were all bunched together like runners at the start of a marathon”, says Bespoke Investment.Today, however, they are increasingly spread across the course. The easy gains from buying the entire pack have given way to a more discriminating market, in which company-specific fundamentals matter again, resulting in the gap between the best and worst performers widening dramatically.Importantly, the same pattern is evident across the wider market. Bespoke says stock dispersion within the S&P 500 has climbed to the 98th percentile of historical readings. In plain English, that means individual companies are increasingly rising and falling on their own news rather than moving together with the rest of the market. It seems that the early phase of the AI boom rewarded anyone with a half-decent story, but investors are now asking tougher questions. Which companies will generate lasting profits from billions of dollars of AI investment? Which will simply keep pace? Which risk falling behind?As the AI boom continues, says Bespoke, so will this trend. “Some of the mega-caps will thrive and grow even larger, while others will make mistakes, lose relevance, and slowly work their way off the list of the world’s largest companies.”[ Is the US AI bonanza a fundamentally secure investment or an old-fashioned bubble?Opens in new window ]And there is one other takeaway for ordinary investors. There’s an old warning: never confuse brains with a bull market. For most of this bull market, almost anyone who dabbled in stocks looked like a genius because almost everything went up.However, the market is now becoming much tougher to judge. Bull markets have a habit of flattering investors, but this one has started to become much less complimentary.