These underperforming trades could yield big returns over next six months — SkimNews
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- Mike Akins urged investors to increase exposure to software and cloud-computing stocks, saying many have retreated from “nosebleed valuations” while retaining strong growth prospects.
- Disruptive technology offers access to mid- and small-cap names left behind by the mega-cap, semiconductor-led market, with Akins citing analysts’ earnings-growth estimates as support.
- The Magnificent Seven index fell more than 2% in the first half as the Nasdaq-100 gained nearly 20%, then rose 5% in early second-half trading while the Nasdaq-100 declined 1% through Friday.
- The Russell 2000 has gained almost 20% this year, compared with an almost 11% increase for the broader S&P 500.
- Small- and mid-cap stocks remain favorable into 2027 in Akins’ view, based on growing earnings and revenue plus potential expansion from valuation multiples depressed for several years.
Why it matters: For investors concentrated in first-half AI leaders, the early reversal changed the relative-return picture: the Magnificent Seven rose 5% as the Nasdaq-100 fell 1%. Akins ties the broader opportunity to earnings growth and valuation expansion among smaller companies whose multiples have remained depressed for years.
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