The AI rally has been one of the biggest market stories of 2026. Technology stocks surged, AI infrastructure names outperformed, and growth stocks became the main driver behind market gains.
But after months of strong performance, analysts are starting to shift the conversation.
The question is no longer whether AI works. It is whether investors should begin moving some profits from growth stocks into value names.
Since late March, growth clearly dominated the market. The Morningstar US Growth Index gained 20%, while the technology index climbed 32%. In comparison, value stocks rose only 4%, showing how wide the performance gap became.
AI remained the center of the rally, with most of the strongest performers linked directly to chips, infrastructure, and data-center expansion.
Technology still looks attractive, but the margin of safety has narrowed. The sector now trades at roughly a 7% discount to fair value, compared with 25% in March. Communications stocks, including names like Alphabet and Meta Platforms, also became less discounted after the rally.
That does not mean analysts are turning bearish on AI. Instead, they suggest rebalancing exposure. Areas now drawing more attention include:
- Value stocks left behind by the AI rally
- Energy names
- Stable cash-flow businesses
- Defensive sectors
At the same time, investors are still expected to keep exposure to long-term AI winners such as NVIDIA and Broadcom.
Markets are still moving with AI. But the next phase may look different. Instead of chasing every growth stock, investors may start asking where value still remains.
Related: AI Rally Stays Strong, but Investors Are Starting to Look Beyond Growth Stocks
Disclosure: This article does not represent investment advice. The content and materials featured on this page are for educational purposes only.
