Market strategists are increasingly positioning for a rotation away from the narrow band of artificial intelligence giants that have driven equity gains in the first half of the year.
ETF Action co-founder Mike Akins is urging investors to increase exposure to overlooked sectors, specifically software and broader technology groups that have lagged behind the so-called "Mag 7" performers.
The recommendation reflects a growing consensus that the valuation gap between AI infrastructure leaders and application-layer software companies has reached a point where risk-reward favors the latter.
While mega-cap tech stocks have benefited from the generative AI build-out, many software firms have seen their multiples compress as capital flowed into the most visible beneficiaries of the trend.
This shift in sentiment comes as broader market participants look for new sources of alpha entering the second half.
The strategy hinges on the belief that earnings growth in software and enterprise tech will outpace the lofty expectations already priced into AI hardware and cloud infrastructure stocks.