AI vs Value

Big hype. Quiet opportunities. A sharper way to think about risk.

Image source. WIX AI

Lately (October 2025), the IMF (International Monetary Fund) and other market watchers have sounded a familiar note of caution: a handful of mega-cap US tech firms, the so-called ‘Magnificent Seven’, have grown to dominate both headlines and portfolios. Nvidia, Tesla and their peers have powered much of the market’s gains. But they’ve also concentrated risk.

For investors holding a lot of these names directly or indirectly through funds, a sharp correction could weigh heavily on overall performance. That doesn’t mean panic or prediction. It simply raises a question worth asking: ‘Am I too exposed to one story’?

Looking beyond the obvious

One practical response isn’t to ‘get out’ but to broaden out, rotating some exposure into parts of the market where valuations remain modest. This is where styles like Value and Deep Value investing quietly come back into view.

When Growth narratives run hot, Value often gets ignored. Yet history suggests that when momentum cools, markets can widen, creating opportunities in areas like commodities, healthcare, and consumer staples.

Not all Value funds avoid technology either. Some managers buy tech, just not at any price. What matters is the valuation, not the label.

Why valuation matters

Take Nvidia as an example: its price-to-earnings ratio sits at a level some consider stretched. Others see it differently. That’s fine, markets thrive on difference.

But if you’re uneasy about the risk of holding richly valued stocks in a downturn, Value and Deep Value strategies can offer a counterbalance. Historically, these styles have sometimes acted as a buffer in falling markets, because they focus on companies priced below their perceived intrinsic worth.

That said, not all cheap stocks are bargains. Value investing isn’t about chasing low numbers, it’s about understanding what you’re actually buying.

A few names in this space

Over the years, I’ve met with asset managers that have a keen focus on Value and Deep Value, managers like Lightman Investment Management, Pzena Investment Management, ARGA Investment Management, and Kopernik Global Investors. They each bring a slightly different angle to these styles of investing.

I’ve also followed Invesco’s Martin Walker and Jupiter’s Alex Savvides, both of whom offer thoughtful approaches to this style. The point here isn’t to promote, but to highlight that the Value camp is diverse, not monolithic.

Riding different waves

‘Go, go growth’ is exhilarating while it lasts. But all waves eventually crest and flatten, leaving investors waiting for the next swell.

What I’ve come to appreciate about Value and Deep Value investing is its potential to limit downside in rougher seas, and its focus on companies whose underlying worth can compound over time. That said, no style is perfect. False bargains exist, and patience is often required.

Disclaimer: This article is for information and educational purposes only. It expresses my personal views and frameworks for thinking about markets and investing. It does not constitute investment advice or a financial promotion, nor is it a personal recommendation to buy or sell any investment. Everyone’s situation is different, so if you are unsure about a decision, it’s important to seek guidance from a qualified financial professional.

The views, forecasts, and figures included reflect analysis at the time of writing, unless otherwise stated. sources used are believed to be reliable, but markets and circumstances can change quickly, which means our views may also evolve over time.