The stock market continues to trade at elevated levels, increasingly driven by a narrow group of mega-cap technology stocks. That concentration has prompted renewed warnings from investors including Michael Burry, who have highlighted stretched valuations across the Magnificent 7.

So what should investors be doing in a market increasingly dominated by a narrow group of mega-cap technology stocks?

Stock market risks are building — but the trend is still intact

The US stock market continues to trade at elevated levels. One widely watched valuation measure — the so-called Warren Buffett indicator, which compares total market capitalisation to GDP — is currently above 200%.

A significant share of recent gains continues to be driven by semiconductor stocks and the large hyperscalers, as investment into AI infrastructure accelerates across the sector.

At the same time, broader macro risks remain in the background. Energy prices, geopolitical uncertainty, and the path of inflation are still unresolved, even if markets are currently looking through them.

As veteran market observer Bob Farrell once noted:

Parabolic moves tend to go further than people think, but they do not correct by going sideways.

In other words, strong trends can persist well beyond the point where valuation concerns first emerge. The current backdrop remains one of liquidity support, earnings strength in key areas, and persistent investor momentum.

For investors, the key question is no longer whether markets are cheap or expensive, but whether leadership can begin to broaden beyond a small number of dominant names.

Beyond the Magnificent 7

While much of the focus has remained on technology and artificial intelligence, other parts of the market have been quietly moving.

Resource stocks, in particular, have started to re-rate, supported by resilient commodity prices and ongoing demand for industrial metals. One example is Glencore (LSE: GLEN), which has recently reached record highs despite attracting far less attention than the major US technology names.

Where opportunities are starting to emerge

The group has traditionally been viewed as a highly cyclical commodities business, heavily exposed to swings in coal and base metal prices. That perception, however, is gradually starting to shift.

Copper is increasingly being viewed as a structural demand metal. Demand is being driven by electrification, grid expansion and the build-out of AI-related infrastructure.

At the same time, supply remains constrained. New projects are slow to come online due to permitting delays and rising development costs.

This is beginning to change how the business is assessed. Rather than being viewed purely as a short-cycle miner, it’s increasingly being considered through the lens of long-term industrial demand exposure across copper, zinc, and nickel.

What could go wrong

Despite the improving narrative, the investment case still depends heavily on commodity prices. These remain volatile and sensitive to global growth, particularly in China.

There is also execution risk around future development projects. The timing and economics of new copper supply will play a key role in long-term returns.

For now, the key point is simple: the stock market narrative remains concentrated in a narrow group of technology leaders. Other areas are starting to show independent momentum.

Resource stocks are one example of this shift. They are not replacing current leadership, but they do suggest that returns are beginning to broaden beneath the surface.