The Great Rotation: Money Flows Out of Big Tech and Into Small Caps

Investors are shifting capital away from high‑valuation technology stocks and moving into smaller companies with faster earnings growth, a trend described as the “Great Rotation.” According to a recent Seeking Alpha article, this market rotation aligns with the author’s 2026 outlook, where expensive Big Tech stocks — including the so‑called “Magnificent 7” — have lagged, while small‑cap indexes like the Russell 2000 have gained nearly 7% year‑to‑date compared to a 1.4% decline in major tech names. This change suggests broader market participation beyond large growth staples. The article highlights the potential opportunities in sectors such as housing, with early signs of recovery in home sales and improving affordability helping related small caps and financial names. Investors may find value in mortgage originators, servicers, housing‑related retailers, and select smaller firms that stand to benefit from a gradual economic rebound throughout 2026. Rather than fixating on daily headline moves, the piece emphasizes that beneath apparent market noise, a tactical reallocation of assets is underway, with investors increasingly willing to embrace risk in pursuit of earnings and value outside of the tech megacaps. #StockMarketRotation #SmallCaps #BigTech #InvestingTrends #SlimScan #GrowthStocks #CANSLIM