The tech rally is about a lot more than Magnificent 7 right now

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The broadening of the AI trade is here.

One of the most common calls among Wall Street strategists entering the year was for the AI trade to expand further from seven key popular players into a slew of other areas of the market.

Since the April 8 market bottom, it's been happening. AI chip and data center trades not named Nvidia (NVDA) have been among the S&P 500's (^GSPC) best performers, with Broadcom (AVGO), AMD (AMD), and Dell (DELL) up roughly 70% or more in that timeframe.

The AI energy trade has taken off too, with Vistra Corp (VST) and NRG Energy (NRG) up more than 80%. The AI cloud trade has emerged as well: Oracle (ORCL) is up more than 70% and trading at an all-time high.

To be fair, some of the "Magnificent Seven" have also risen off the bottom. Nvidia has led the pack, rising over 60% to recently notch a new all-time high.

But as our Chart of the Week shows, none of the Magnificent Seven have outperformed the other AI stocks that are among the top 20 best-performing stocks in the S&P 500 since the market bottom.

After two years of there only being a few large-cap tech names in town, investors looking to outperform the market during the massive run higher of the past two months have had more success looking beyond the most popular stocks of the current bull market.

This reveals a common truth about bull markets. They're about themes, not individual stocks. In the 1920s, the bull market was defined by surging demand for radio communications and automobiles. The dot-com bubble that ran in the late 1990s was, of course, focused on the initial hype of the internet.

But after rising more than 270% from 1995 to the end of 1996, Cisco (CSCO), the poster child of the era, wasn't among the market's top 10 performers come 1997 to 1999.

The theme stayed, but the best-performing stocks in the market oscillated. If you listen closely, that's what many on Wall Street have been saying for a while now. It's an AI and tech bull market, not the "Magnificent Seven" bull market.

Whatever it's called, it's certainly ongoing and has "further to run, as Julian Emanuel, who leads the equity, derivatives, and quantitative strategy team at Evercore ISI, wrote this week in a note to clients.

"Despite the near-term uncertainty," he wrote, "the four elements that end bull markets [a recession, Fed hikes, spiking bond yields, and extreme stock valuations] are all absent."

— Josh Schafer, Markets Reporter at Yahoo Finance