HALO Beats Mag 7 for Global Gold
Global leadership broadens beyond mega-cap tech
While the U.S. hockey team beat the world for Olympic gold, U.S. stocks are not winning globally. American equities are off to their worst start versus international markets in roughly 31 years, since 1995, according to Goldman Sachs Research, dragged down by mega-cap tech. Since the start of the year the S&P 500 is roughly flat while the MSCI ACWI, the broad All Country World Index, has gained about 8%. After a decade of dominance, U.S. stocks began trailing global markets last year and the gap has widened in 2026. Europe, Japan, and emerging markets are rallying while U.S. valuations remain elevated and the dollar has softened. (see chart below)
This reversal is not random. Elevated U.S. valuations, heavy dependence on a handful of mega-cap tech companies that now account for roughly 37% of the S&P 500’s effective exposure across sectors, according to S&P Dow Jones estimates, fiscal expansion abroad, and a weaker dollar have shifted leadership overseas. Most major European markets are beating the U.S. this year, many by double digits. Meanwhile the Magnificent Seven have stalled and slipped into correction territory, down roughly 10% from last fall, based on the Roundhill Magnificent Seven ETF (MAGS), as AI expectations normalize.
For U.S. investors, the implication is uncomfortable. Many portfolios remain domestic and tech-heavy by design or drift. That concentration worked when U.S. mega-cap growth dominated returns. It becomes risk when leadership broadens globally. Is the era of automatic U.S. and mega-cap dominance ending? No. But leadership is clearly widening.
The 2026 Olympic hockey final ended United States 2, Canada 1 in overtime. Goalie Connor Hellebuyck stopped 41 of 42 shots. Markets work the same way. Offense gets headlines. Defense wins championships. Our 2026 thesis has not changed from last year’s Great Rotation. To paraphrase Wayne Gretzky, skate to where the puck is going, not where it has been. International and HALO are where the puck is moving.
Tech Volatility Is Normal, Not Collapse
Control the puck. Control the game
The recent tech and AI pullback should not surprise anyone. (see chart) After a three-year surge led by the Magnificent Seven, expectations stretched and valuations elevated. The Nasdaq softening and mega-cap tech correcting about 10-11% reflects normalization, not structural failure. AI remains a multi-year capital cycle. What changes now is pace and breadth of returns.
With many software stocks such as Adobe and Bitcoin both still roughly 50% below peaks, this is not the moment to “double down” if you are already overconcentrated. It is also not the moment to sit in cash after a windfall. Whether this resembles prior tech corrections or simply another rotation, the discipline holds. Lump sum or dollar-cost averaging, keep allocating. Do not freeze.
HALO Beats Mag 7: The Next Phase After AI
Defense Wins Championships
We are not exiting tech. We are reducing excess concentration in our strategic balanced client portfolios and aligning with the market’s rotation according to our thesis. Many investors allowed mega-cap exposure to swell toward late-1990s levels or deliberately loaded up on tech indices and stocks. That leaves portfolios exposed when leadership rotates.
The next AI phase looks less purely digital and more physical. Materials, energy, industrials, infrastructure, staples, and supply chains all sit downstream of AI capital spending. This rotation now has a Wall Street label. HALO. Heavy assets. Low obsolescence. These sectors are already gaining traction year to date (see chart).
If AI threatens code and workflows, own what cannot be automated away. Factories. Grids. Pipelines. Machinery. Brands. Distribution. HALO is not anti-tech. It reflects AI capex spilling into the real economy and lifting sectors beyond technology.
Market internals already show the shift. Mega-cap tech corrected while equal-weight equities advanced. The S&P held flat while the Magnificent Seven slipped into correction territory. That divergence typically signals rotation, not market failure.
Portfolio Positioning (Lump sum or Dollar Cost Average)
We are trimming outsized mega-cap exposure and reallocating toward durable sectors with pricing power and stronger valuation support. Materials. Energy. Infrastructure. Industrials. Staples. Health care. We also maintain meaningful exposure to international and emerging markets where valuations are lower, rate cycles are earlier, and tech concentration is smaller.
For investors with new cash, focus on deployment discipline. Phase lump sums over several months into diversified portfolios. Do not funnel fresh capital into concentrated tech positions simply because prices fell. Pullbacks alone do not create value. Positioning and balance still matter.
For retirement savers, keep contributing. Dollar-cost averaging exists for this environment. Volatility improves long-term entry points. Stopping contributions during drawdowns usually locks in poor timing.
Next Gen Investors (Millennials, Gen Z)
With roughly 37% of the S&P 500’s economic exposure tied to mega-cap tech and driving about half its movements, investors can become heavily tech-exposed without realizing it. That happens deliberately through tech funds or passively through index ownership. Concentration today often arrives by association, not intent.
We also now have a generation of investors who have never experienced a true tech collapse. It has been about 26 years since the dot-com peak and 18 years since the financial crisis. Many Millennial and Gen Z investors built wealth in an era where buying growth and staying aggressive paid off quickly. That can leave portfolios carrying more risk than owners fully appreciate.
This is not a forecast of a tech bust. It is a reminder that cycles exist and concentration amplifies them. Periodic rebalancing, diversification beyond mega-cap growth, and position limits remain essential even in structurally strong sectors like technology.
Strategies That Help Protect Portfolios
Selective structured notes and modest allocations to private credit or private equity can help dampen volatility and smooth return paths. Short-duration bonds, gold, real assets, and diversified income strategies can also stabilize portfolios while equity leadership broadens globally and across sectors.
History is consistent on one point. The greatest portfolio damage during rotations comes from emotional exits near inflection points. AI remains a multi-year capital cycle. Leadership will broaden and returns will normalize. Investors who maintain exposure while widening participation tend to preserve gains and capture the next phase. The objective is not to escape volatility. It is to own a portfolio that can compound through it.
AI Is Still Eating the World
Software once arrived in boxes on retail shelves in the 1980s and 1990s. Cloud erased that model. AI is the next step in software’s evolution. Capital is shifting inside tech from applications toward compute and infrastructure. That is why traditional software has lagged while semis and data-center supply chains led. The market is signaling where durable AI economics likely reside.
Why a Pause Fits the AI Story
Every major tech cycle runs in phases. Capital rushes in. Stocks surge ahead of profits. Then reality catches up. Railroads, electrification, internet, cloud. Each saw peak stock returns before peak economic impact. AI is following the same script. (see chart)
Mega-cap tech still dominates the economy. But business strength and stock returns often diverge after big runs. Much of the AI buildout was priced between 2023 and 2025. Three limits now matter. Scale. Trillion-dollar firms cannot sustain hyper-growth forever. Valuation. Multiples already expanded in the enthusiasm phase. Timing. Capex hits before earnings as firms spend first on chips and data centers.
That mix usually leads to uneven or sideways markets while profits catch up. Investors now want proof that massive AI spending turns into margins and cash flow.
Meanwhile the AI boom is spreading into the physical economy. Data centers need power, cooling, land, and equipment. Electrification needs copper, transformers, and grid upgrades. Supply chains need machinery and transport. Capital is moving from platforms to providers. The same AI cycle that lifted software now lifts energy, materials, and industrials.
Bottom Line: While HALO beats Mag 7 as ai cools off, AI remains real and central to global growth. What is changing is not technology’s importance but the concentration of returns. After an unusually narrow surge led by a handful of mega-cap companies, leadership is beginning to broaden across sectors and regions. That shift is normal and healthy
The objective is not to retreat from innovation. It is to reduce overdependence on a single trade. Portfolios that became heavily tilted toward mega-cap tech during the runup now carry concentration risk that was easy to overlook in a rising market. As the cycle matures, returns are likely to disperse toward industries tied to the physical buildout of AI and toward markets where valuations and policy cycles differ from the U.S.
The next phase likely looks less like pure software and more like infrastructure, energy, materials, industrial capacity, and global participation. Maintain core exposure to technology. Broaden beyond it. Trim concentration where it quietly accumulated.
In short: less Mag7 dominance, more HALO leadership.
For more information on our firm or to request a complimentary investment and retirement check-up, call (561) 210-7887 or email jon.ulin@ulinwealth.com.
Author: Jon Ulin, CFP® is the founder and Managing Principal of Ulin & Co. Wealth Management, an independent advisory firm based in South Florida for over 20 years. As a fiduciary wealth advisor, Jon helps successful individuals, families, and business owners nationwide with multi-generational planning, investment management, and retirement strategies. Learn more about Jon and our team at About/CV.
Note: Diversification does not ensure a profit or guarantee against loss. You cannot invest directly in an index.
Information provided on tax and estate planning is not intended to be a substitute for specific individualized tax or legal advice. We suggest that you discuss your specific situation with a qualified tax or legal advisor.
You cannot invest directly in an index. Past performance is no guarantee of future returns. Diversification does not ensure a profit or guarantee against loss. All examples and charts shown are hypothetical used for illustrative purposes only and do not represent any actual investment. The information given herein is taken from sources that are believed to be reliable, but it is not guaranteed by us as to accuracy or completeness. This is for informational purposes only and in no event should be construed as an offer to sell or solicitation of an offer to buy any securities or products. Please consult your tax and/or legal advisor before implementing any tax and/or legal related strategies mentioned in this publication as NewEdge Advisors, LLC does not provide tax and/or legal advice. Opinions expressed are subject to change without notice and do not take into account the particular investment objectives, financial situation, or needs of individual investors.
