‘AI is coming for every industry’: Strategist talks rotation trade

Yahoo Finance Video and Josh Lipton

Wed, February 11, 2026 at 9:30 PM GMT+9

In this video:

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As software stocks attempt to find stability after last week’s sell-off sparked by growing AI concerns, Wealthspire Advisors chief market strategist Chris Maxey comments on the state of the rotation trade and how AI is impacting most industries.

Also catch Chris Maxey weigh in on how investors have been reacting to Big Tech’s massive AI spending.

To watch more expert insights and analysis on the latest market action, check out more Market Domination.

Video Transcript

00:00 Speaker A

Sticking with AI though, Chris. What what do you make of just the rout in software? Jared at the top of the show was talking about. I mean, maybe some signs of stabilization there, but some of these names have just been murdered, right? Does it make sense to you? Did you look at that and say, OK, that seems reasonable, or no, it’s an overreaction?

00:15 Chris

Um, I think it makes sense right now because nobody knows who the winners and the losers are going to be. So you know, in a world where you don’t have the benefit of that knowledge, you say, let’s take everybody out of the market. Let’s forget about all of them and then we’ll assess the competitive dynamics later on. We we are seeing that the competitive dynamics are going to begin to change though, right? We’re we’re going to tease out who the winners and losers are a little bit later this year as we start to progress forward. Right now though, AI is coming for every industry. We’ve seen it happen in the insurance industry as recently as yesterday. and all insurance stocks were down. Does that mean that every insurance company is going to be out of business in 10 years time? I don’t think so, but you need a a couple of quarters, you need a couple of years to be able to uh determine where the impacts are and to be able to make that assessment.

00:48 Speaker A

You you talk about the rotation we’re seeing there, Chris, let’s just dig into that. So, uh you point out energy, industrial, small caps outperforming. You expect that out performance to continue?

00:55 Chris

Uh, we do. and the biggest reason is that your starting point is what’s going to matter. So starting point valuations are lower for all of those segments, whether you’re looking at international stocks, you’re looking at small cap stocks. If you’re looking at energy, industrials, anything of a cyclical orientation, your starting point valuations are lower such that your go-forward return expectations can be better. So we’ve been guiding clients, we’ve been working with clients to say, all right, you’ve had technology in your portfolio for 10 10 years, 15 years, maybe even longer, and it’s been in favor. Let’s just think about moving in a slightly different direction. What we’re finding is that a lot of people are underweight all of those pockets of the market, so you have this flow of funds that’s coming out of tech, out of growth stocks, moving in those directions, and um it’s going to continue to be a tailwind. So, don’t also forget that economic growth is starting to accelerate. Uh we’ve seen over the last six months as you introduce the OBBBBA, that economic growth is accelerating. That’s going to continue this year. You have tax refunds that are coming. So those cyclical companies now have that tailwind in addition to lower interest rates, which is in their favor too.

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