Institutional Funds Shift from AI Small Caps to Defensive Stocks
The indiscriminate buying of AI semiconductors and tech stocks is weakening. Institutional funds are moving out of small AI stocks and into defensive sectors such as finance and healthcare. Paradis Labs analyzed that while the AI supply chain is expected to rise in the first and second quarters of 2026, this is attributed more to a recovery in valuations rather than improvements in corporate fundamentals. After deleveraging in July, institutional investors showed signs of reducing their exposure to small AI stocks in the US and Europe while buying defensive assets. European funds are adopting a cautious stance towards high-risk AI stocks, which can be interpreted as a movement to reassess the balance between risk and return. Paradis Labs is focusing on companies that adopt AI and has suggested selection criteria based on having a difficult-to-replicate business moat and strong cash conversion efficiency. Notable examples include Uber, Netflix, and Meta. The costs of AI infrastructure and operational complexity are significant variables affecting the performance of companies' AI adoption. The investment logic is shifting towards selecting companies where AI adoption can translate into actual business metrics, rather than encompassing the entire AI supply chain.
-- Price
This content is provided for general informational purposes only and doesn't constitute financial, investment, legal, or tax advice. Any events, rewards, online promotions, or related information mentioned herein should not be considered a recommendation, solicitation, or invitation to purchase, sell, trade, or otherwise deal in any crypto assets. Crypto assets are highly volatile and may result in loss. The availability of WEEX services, products, and related events may vary by region. You are responsible for ensuring that your participation is in accordance with applicable local laws and regulations.
You may also like

Importing Phones Requires IMEI Code Registration from September 4

Base Loan Balance Reaches $2.337 Billion, Concentrated in Morpho

PL Deputy Proposes Gun Carrying Rights for Cryptocurrency Investors and Industry Executives

Why GENIUS could leave digital dollars vulnerable to sudden blockchain network ‘bank runs’

Gold Reaches Key Level After Correction and Recovery

Cybercrime, Child Gambling, and Underground Banking

Increased Likelihood of the UK Returning the Falklands to Argentina

US Employment Surprises Threefold, Renewing Tightening Concerns... Dollar and Interest Rates Rise Together

Full Sail Shuts Down After Switchboard Incident

Tornado Cash Mentioned in 107 Investigations, Not Scale of Processing

Cryptocurrency Dollarization: Why Bitcoin May Challenge the US Dollar

Canary Capital teases staked TRX ETF launch

Kalshi adds 5 crypto perpetuals for U.S. traders

AIINU Price Prediction After 27% Drop: Rebound or More Losses?

Notional Finance faces suspected $1.7M exploit

NCA Freezes Approximately $13.5 Million in Premier League Account, Investigating Connection to Sorare Payments

Creators Speak | Is a New Round of Crypto Bull Market Coming?

Increase in Crypto-Backed Lending Amid Bear Market, A Funding Alternative to Selling = CryptoQuant

Europe Launches MTG-I2 to Accelerate Storm and Fire Monitoring

Circle Reserve Attestation Shows USDC Backing Above Circulating Supply

Despite Trump's Tariffs, U.S. Trade Deficit Reaches $88.6 Billion

S&P Merval halts recovery and ADRs fall by up to 3%, while country risk remains below 500 points

Yen Soars, Dollar Falls: Bitcoin Benefits... But For How Long?

European Savings Confiscation: Is State Appropriation of Private Assets Inevitable?

Analyst Says Bitcoin Daily Chart Forms Descending Wedge, Market to Enter Consolidation Phase

Lazarus Wallet Moves Over $30 Million Through Hyperliquid

What is short selling? The trading minute

MUFG and Progmat Begin Proof-of-Concept for Tokenized Investment Trusts in Real Environment

Current Status Ahead of Litecoin's Next Halving












