How the Value Trade Has Been Smoked by the AI Frenzy
- Cheap stocks lagging behind growth in big reversal from 2022
- Value’s rise undermined again by the hegemony of tech megacaps
This article is for subscribers only.
As fast as it went up for value managers, it’s coming down. The culprit is the all-consuming craze for artificial intelligence.
Proponents of the buy-cheap philosophy have been battered by the relative performance of tech stalwarts, resulting in a mirror image of 2022, when value stocks had their best year versus growth since the dot-com crash. In one example, a Russell 1000 subindex housing the likes of energy producers and banks is trailing a counterpart pegged to growth stocks by the most in more than two decades.