Investors urged to look beyond US tech stocks

Binaya Dahal

Journalist, Financial Newswire

18 March 2026

The concentration of capital in a handful of US mega-cap technology stocks over the past decade has created a significant blind spot for investors, says Eric Marais, Head of Investment Specialists at Orbis Investment Management.

He said that while the emergence of artificial intelligence (AI) has provided a further accelerant to that concentration, investors chasing breakout AI returns in US markets are paying increasingly high prices while overlooking valuable alternative elsewhere.

“The first missed opportunity lies within the United States, beyond the mega-cap cohort that dominates benchmarks and headlines,” Marais said.

“Beneath the surface of the S&P 500 sits a wide universe of high-quality mid-cap businesses with strong cash flows, durable competitive positions, attractive growth prospects, and even AI-driven productivity gains.”

Marais points to the US business payments company, Corpay, as an example of an overlooked value opportunity. Founded by Ron Clarke, the firm trades at just 12x forward earnings despite delivering high-teens long-term earnings-per-share growth.

He also refers to South Korean companies Samsung Electronics and SK Hynix, both of which play a critical role in the global AI ecosystem through their leadership in memory semiconductors.

Despite this, they currently trade at single-digit price-to-earnings multiples, which Marais describes as reflecting lingering investor caution about the memory cycle.

“The market worries about the sustainability of the current earnings cycle in memory, ultimately underpinned by the continued buildout of AI-focused data centres,” he said.

“While there will undoubtedly be slowdowns and interruptions along the way, we believe the market for memory may be fundamentally shifting.”

Historically, Marais said memory chips were viewed largely as commodities, bought and sold in volatile markets where prices moved sharply with changes in supply and demand. Today, however, they are increasingly designed into specialised systems that power generative AI and large-scale data processing.

He believes when that design cycle takes hold, pricing will shift toward longer-term contracts and away from the spot market, and it will improve earnings stability for the memory players.

For Australian investors, Marais said these dynamics show the importance of taking a genuinely global, bottom-up approach to equity investing.

“Many portfolios already carry substantial exposure to US equities through global benchmarks that are heavily weighted toward mega-cap technology stocks,” he said.

“While this can create the appearance of diversification, in practice it often results in concentrated exposure to the same narrow group of companies and risks—while missing potentially attractive opportunities elsewhere.”