‘Money's moving out of tech’: Wall Street weighs stock market winners amid the AI scare trade

February 23, 2026 - 00:14

A significant rotation is underway on Wall Street as capital flows out of the once-unassailable mega-cap technology stocks. Market analysts report a growing investor unease with the stratospheric valuations of companies most closely tied to the artificial intelligence boom, prompting a search for value and gains elsewhere.

This movement, dubbed by some as the "AI scare trade," reflects concerns that the current hype may have overshot fundamentals. The fear of a potential bubble in pure-play AI names is driving a more cautious approach. Instead, money is increasingly finding its way into sectors perceived as more stable or undervalued in the current climate.

Notable beneficiaries of this shift include segments like energy, utilities, and healthcare. These industries are attracting attention for their defensive qualities, reliable dividends, and lower exposure to the speculative frenzy surrounding AI. Furthermore, within the broader market, there is growing interest in small and mid-cap stocks, which have lagged behind the tech-driven rally and now present a relative value opportunity.

Financial advisors suggest this rotation indicates a maturing market cycle where diversification is becoming paramount. While the long-term prospects for artificial intelligence remain robust, the short-term trade has become excessively crowded, leading to this tactical retreat into other corners of the S&P 500 and beyond. The move underscores a classic Wall Street pattern: profit-taking from overheated sectors and a redeployment of those funds into areas with clearer immediate horizons.