Rotation from Big Tech to extend further: deVere

Binaya Dahal

Journalist

7 July 2026

The rotation away from mega-cap technology stocks will continue throughout the remainder of 2026, as investors have started looking beyond the narrow group for the next wave of returns, says Nigel Green, chief executive of deVere Group.

As the market moves towards what he described as the “beginning of one of the most important reallocations of capital since the post-pandemic recovery”, Green said sectors such as financials, healthcare, energy, industrials and infrastructure are in prime position to lure investors over.

“For years, returns became increasingly concentrated in a handful of mega-cap technology companies. This trade generated exceptional wealth. It also created extraordinary concentration risk,” Green said.

“Investors are now repositioning aggressively because they recognise that opportunity has expanded far beyond the narrow group of stocks that dominated markets over recent years.”

The shift accelerated after the latest US employment report showed the economy added 57,000 jobs in June, roughly half of consensus expectations, while previous months’ figures were revised lower.

Green said the reports of weakness in momentum-driven semiconductor stocks further strengthened expectations that broader market participation could become a defining feature of the second half of the year.

He added the changing expectations for interest rates also supported renewed interest in sectors that lagged the AI-driven rally and stand to benefit from a more stable monetary environment.

Markets have reduced expectations of further Federal Reserve tightening, with investors increasingly betting that policymakers will remain on hold as labour market momentum slows.

“The Federal Reserve remains central to this story. Markets are increasingly concluding that policymakers have room to be patient, and that changes the opportunity set for investors considerably,” Green said.

“When interest rate expectations stabilise, capital typically broadens out across the market. We believe that process has already begun.”

Green said many investors remained focused on the winners of the previous market cycle but warned that history suggested such concentration could limit future returns.

“The investors who identify major transitions early are typically the ones who benefit most. The mega-rotation has powerful economic, monetary and valuation drivers behind it,” he said.

“Our view is that this trend has further to run, participation will continue to broaden, and the opportunities emerging across global markets are exceptionally compelling.”