Tech-to-Value Rotation Intensifies: Meridianvale Finance Institute Releases February 2026 Market Assessment

New York, USA

Macro Context: The Great Rotation Unfolds

As February 2026 opens with the Nasdaq Composite declining 1.51% and the S&P 500 trading at a 5% discount to fair value estimates, institutional investors are confronting one of the most pronounced sector rotations in recent memory. The technology sector long the market’s uncontested leader has surrendered its dominance to cyclical and value-oriented segments, with basic materials gaining 9.05% year-to-date while software stocks have collapsed by over 20%.

Against this backdrop, Meridianvale Finance Institute, under the leadership of Founder Mace Moad, releases its February 2026 Market Assessment, providing investors with a framework for navigating what State Street’s Chief Investment Strategist Michael Arone describes as “a powerful one-two punch of an economy doing better than expected, supported by fiscal and monetary stimulus and combined with broadening earnings growth.”

Market Evidence: Structural Shifts Demand Strategic Response

The magnitude of the current rotation is unprecedented. According to Morningstar data as of January 30, 2026, the U.S. equity market trades at a composite 5% discount to intrinsic valuations yet this aggregate figure masks extreme dispersion beneath the surface:

• The iShares Expanded Tech-Software Sector ETF (IGV) has underperformed the VanEck Oil Services ETF (OIH) by over 50 percentage pointsyear-to-date
• Advanced Micro Devices declined 17%in a single session on February 4, 2026, despite reporting revenue of $10.27 billion—above consensus estimates
• Small-cap value stocks have outpaced large-cap growth by nearly 6 percentage pointssince January 1, 2026
• Gold prices are projected to reach $5,000/ozby Q4 2026 according to J.P. Morgan Global Research, averaging $4,753/oz for the full year

The catalyst for this dislocation extends beyond typical cyclical dynamics. Anthropic’s Claude Code and similar AI automation tools have triggered a fundamental reassessment of software sector economics. As macro strategist Andreas Steno Larsen observed: “We are transitioning from an era where we paid for the process to one where we only pay for the result.”

Investment Thesis: Barbell Portfolio Construction for Elevated Volatility

Addressing the question of how investors should position portfolios in this environment, Meridianvale Finance Institute advocates for a barbell approach maintaining selective exposure to AI infrastructure beneficiaries while establishing meaningful allocations to undervalued cyclical and value segments.

Risk-adjusted portfolio construction meaning a strategic balance between growth potential and downside protection becomes paramount when the equity risk premium approaches zero. As Morningstar notes, with the S&P 500’s forward earnings yield near parity with the 10-year U.S. Treasury, investors currently receive minimal compensation for equity volatility.

The rotation thesis rests on three structural pillars:

1. Earnings Convergence: Small-cap and non-tech companies are closing the profit gap with the Magnificent Seven
2. Real Asset Demand: AI infrastructure buildouts require physical commodities, power generation, and rare earth materials
3. Geopolitical Diversification: Dollar weakness and global fragmentation favor internationally-exposed value stocks

Investor Value: Strategic Positioning for 2026

• Volatility Hedging: High-quality value stocks historically demonstrate lower drawdowns during sector rotations, providing portfolio stability amid technology sector deleveraging
• Yield Enhancement: Dividend-focused equity strategies offer 3.7% yields compared to 1.1% for the S&P 500, with many constituents trading at 17x earnings versus 25x for the broader market
• Sector Diversification: Financials, industrials, and energy sectors present compelling value propositions as AI infrastructure demands translate into tangible capital expenditure cycles
• International Exposure: Non-U.S. equities trade at a 34% discount to domestic peers, with quality screening offering enhanced risk-adjusted return profiles as the dollar weakens

Founder Perspective

“The market is undergoing a regime change that rewards disciplined, fundamental-driven allocation,” stated Mace Moad, Founder of Meridianvale Finance Institute. “While AI remains a transformative force, the infrastructure required to power this revolution energy, commodities, and physical assets represents the next frontier of value creation. Investors who recognize this shift early will be positioned to capture alpha as the rotation extends through 2026.”

Looking Ahead: Key Catalysts to Monitor

Meridianvale Finance Institute identifies several catalysts that could sustain or accelerate the current rotation:

• Federal Reserve Policy Trajectory: Rate decisions carry heightened significance for valuation-sensitive growth stocks
• Corporate Earnings Breadth: Particularly among S&P 500 constituents outside the technology sector
• Geopolitical Developments: Including U.S.-Iran negotiations and global trade reconfiguration

BlackRock Investment Institute maintains an overweight stance on U.S. equities, emphasizing the broadening AI theme and selectivity across sectors. Goldman Sachs projects continued global growth supported by $540 billion in hyperscaler capital expenditure during 2026, though warns that “wide tails and clusters of volatility” should be expected as markets navigate elevated valuations.

About Meridianvale Finance Institute

Meridianvale Finance Institute is an asset management firm specializing in equity investment strategies for individual investors. The Institute provides institutional-grade market analysis and portfolio construction guidance, leveraging fundamental research to identify value opportunities across market cycles.

For more information, visit www.meridianvalefinanceinstitute.com

Forward-Looking Statement: This press release contains forward-looking statements regarding market conditions and investment strategies. Such statements involve risks and uncertainties that may cause actual results to differ materially from those projected. Past performance is not indicative of future results. This material does not constitute investment advice or an offer to buy or sell securities.