A broad and potentially historic shift in global investment is accelerating. Nigel Green, chief executive of deVere Group, one of the world's largest independent financial advisory organisations, says investors are rapidly unwinding concentrated positions in mega-cap technology companies and redeploying capital into financials, industrials, healthcare, energy, infrastructure, and value stocks. The trigger, he argues, is not panic — it is recalibration.

The prediction, reported by Ekstra Bladet and corroborated by data from several market analysts, follows a notably weak US employment report for June. The American economy added just 57,000 jobs — roughly half what analysts had expected — while figures for previous months were revised downward. Markets responded by sharply scaling back expectations of further interest rate rises from the US Federal Reserve, the central bank that sets borrowing costs for the world's largest economy.

The end of a decade of tech dominance

For much of the past decade, a small cluster of US technology giants — often called the 'Magnificent Seven' — drove a disproportionate share of global equity returns. The S&P 500, the benchmark index for American stocks, is weighted by market capitalisation, meaning the largest companies carry the most influence. As those companies swelled in value, passive investors worldwide found themselves increasingly concentrated in a handful of names.

“"For years, returns became increasingly concentrated in a handful of mega-cap technology companies. This trade generated exceptional wealth. It also created extraordinary concentration risk." — Nigel Green, CEO, deVere Group”

The data now points clearly toward a reversal. The S&P 500 Equal Weight Index — which treats every company in the index identically, regardless of size — is enjoying its strongest relative start to a year since 1992, according to market data cited by deVere Group. Morningstar analysts have separately noted that technology is currently the worst-performing sector of 2026 so far, a stark contrast to its leading role during the AI-driven boom of 2025. Small-cap companies, meanwhile, have gained over five percent year-to-date, while large caps have barely moved.

What is driving the rotation — and who benefits

Analysts at T. Rowe Price argue the shift is not merely cyclical but structural. The surge in AI investment has locked the largest technology platforms into a capital-intensive arms race, with the five biggest hyperscalers — companies operating massive cloud and data infrastructure — raising over $108 billion in bonds in 2025 alone. As those spending commitments mount and free cash flow shrinks, the investment case for simply holding these stocks has weakened. Value is beginning to accrue further down the supply chain: to power providers, industrial equipment makers, and infrastructure companies.

Europe is particularly well positioned to benefit from this shift. Vanguard analysts note that increased defence spending across the continent, combined with accelerating investment in renewable energy, is generating multi-year demand for capital-intensive sectors including industrial equipment, materials, and utilities. These are precisely the areas that had been underweighted in global portfolios during the long era of asset-light technology dominance. With valuations in many European sectors still historically attractive relative to their US counterparts, the rotation creates a meaningful opening.

“"The gap between technology earnings growth and the rest of the market is closing. And as it closes, this rally is broadening, which I think is a healthy sign." — Matthew Arone, market strategist, cited by Morningstar”

Caution remains warranted

Not every analyst is fully convinced the rotation will be sustained. FXCM market strategist Russell Shor notes that broader market participation is a positive sign for overall market health, but cautions that the shift remains dependent on the macroeconomic backdrop — particularly on whether the Federal Reserve holds rates steady or is forced to act. If economic data deteriorates sharply, the defensive appeal of technology's strongest balance sheets could reassert itself. Green, however, is clear about where he thinks the second half of 2026 will be shaped: in the sectors that have waited longest for their moment.

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