{"id":16682,"date":"2024-08-01T06:49:57","date_gmt":"2024-08-01T06:49:57","guid":{"rendered":"https:\/\/www.vtmarkets.net\/de\/?p=13943"},"modified":"2025-04-03T10:04:54","modified_gmt":"2025-04-03T10:04:54","slug":"ai-stocks-lead-q3-with-value-plays-rising-for-2024","status":"publish","type":"post","link":"https:\/\/www.vtmarkets.net\/de\/analysis\/ai-stocks-lead-q3-with-value-plays-rising-for-2024\/","title":{"rendered":"AI Stocks Lead Q3 with Value Plays Rising for 2024"},"content":{"rendered":"\n<p><strong>Key points:<\/strong><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The US equity market increased by 3.20% in Q3 and 13.77% year-to-date, largely driven by AI-related stocks.<\/li>\n\n\n\n<li>The price-to-fair value ratio of the US stock market rose to 1.03, indicating potential overvaluation.<\/li>\n\n\n\n<li>Growth stocks are trading at a premium, while value stocks are at a discount, suggesting a strategic shift may be beneficial.<\/li>\n<\/ul>\n\n\n\n<figure class=\"wp-block-image size-full\"><img decoding=\"async\" width=\"625\" height=\"272\" src=\"https:\/\/www.vtmarkets.net\/wp-content\/uploads\/2024\/08\/ai_stocks_lead_q3_img1.png\" alt=\"\" class=\"wp-image-13963\" srcset=\"https:\/\/www.vtmarkets.net\/de\/wp-content\/uploads\/sites\/8\/2024\/08\/ai_stocks_lead_q3_img1.png 625w, https:\/\/www.vtmarkets.net\/de\/wp-content\/uploads\/sites\/8\/2024\/08\/ai_stocks_lead_q3_img1-300x131.png 300w, https:\/\/www.vtmarkets.net\/de\/wp-content\/uploads\/sites\/8\/2024\/08\/ai_stocks_lead_q3_img1-500x218.png 500w, https:\/\/www.vtmarkets.net\/de\/wp-content\/uploads\/sites\/8\/2024\/08\/ai_stocks_lead_q3_img1-400x174.png 400w, https:\/\/www.vtmarkets.net\/de\/wp-content\/uploads\/sites\/8\/2024\/08\/ai_stocks_lead_q3_img1-350x152.png 350w, https:\/\/www.vtmarkets.net\/de\/wp-content\/uploads\/sites\/8\/2024\/08\/ai_stocks_lead_q3_img1-200x87.png 200w\" sizes=\"(max-width: 625px) 100vw, 625px\" \/><\/figure>\n\n\n\n<p>The third quarter of 2024 has seen intriguing developments in the US equities market, with attention on the performance of AI-related stocks.<\/p>\n\n\n\n<p>As we approach the end of the quarter, investors are questioning whether the AI stock trade has reached its peak.<\/p>\n\n\n\n<p><strong>Q3 US Equity Market Boosted by AI-Driven Growth<\/strong><\/p>\n\n\n\n<p>As of June 24, the Morningstar US Market Index, representing the broad US equity market, increased by 3.20% for the quarter and 13.77% year-to-date.<\/p>\n\n\n\n<p>This rise has been largely fueled by the performance of stocks related to artificial intelligence.<\/p>\n\n\n\n<p><strong>AI Stocks Leading the Charge<\/strong><\/p>\n\n\n\n<p>The second quarter&#8217;s gains were concentrated in a handful of AI-related stocks, including Nvidia (NVDA), Apple (AAPL), Microsoft (MSFT), Alphabet (GOOGL), and Broadcom (AVGO).<\/p>\n\n\n\n<p>An attribution analysis reveals that without these gains, the broad market index would have declined. This trend raises questions about the sustainability of the AI-driven rally.<\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><img decoding=\"async\" width=\"625\" height=\"259\" src=\"https:\/\/www.vtmarkets.net\/wp-content\/uploads\/2024\/08\/ai_stocks_lead_q3_img2.png\" alt=\"\" class=\"wp-image-13964\" srcset=\"https:\/\/www.vtmarkets.net\/de\/wp-content\/uploads\/sites\/8\/2024\/08\/ai_stocks_lead_q3_img2.png 625w, https:\/\/www.vtmarkets.net\/de\/wp-content\/uploads\/sites\/8\/2024\/08\/ai_stocks_lead_q3_img2-300x124.png 300w, https:\/\/www.vtmarkets.net\/de\/wp-content\/uploads\/sites\/8\/2024\/08\/ai_stocks_lead_q3_img2-500x207.png 500w, https:\/\/www.vtmarkets.net\/de\/wp-content\/uploads\/sites\/8\/2024\/08\/ai_stocks_lead_q3_img2-400x166.png 400w, https:\/\/www.vtmarkets.net\/de\/wp-content\/uploads\/sites\/8\/2024\/08\/ai_stocks_lead_q3_img2-350x145.png 350w, https:\/\/www.vtmarkets.net\/de\/wp-content\/uploads\/sites\/8\/2024\/08\/ai_stocks_lead_q3_img2-200x83.png 200w\" sizes=\"(max-width: 625px) 100vw, 625px\" \/><\/figure>\n\n\n\n<p><strong>Market Valuation Concerns<\/strong><\/p>\n\n\n\n<p>The US stock market&#8217;s price-to-fair value ratio rose to 1.03, reflecting a 3% premium over fair value estimates as of June 24.<\/p>\n\n\n\n<p>While this doesn&#8217;t yet signal an overvalued market, it places it near the higher end of the fair value range seen since 2010.<\/p>\n\n\n\n<p>Historically, the market has only traded at this premium or higher 10% of the time.<\/p>\n\n\n\n<p><strong>The AI Surge and Its Implications<\/strong><\/p>\n\n\n\n<p>AI-related stocks continued to surge, heavily influencing the Morningstar US Growth Index and, to a lesser extent, the Morningstar US Core Index. Both indexes outperformed the Morningstar US Value Index.<\/p>\n\n\n\n<p>However, based on current valuations, the outperformance of these AI stocks appears to be waning.<\/p>\n\n\n\n<p><strong>Growth vs. Value Stocks<\/strong><\/p>\n\n\n\n<p>Growth stocks traded at a 6% premium to Morningstar&#8217;s composite valuations, and core stocks at a 7% premium as of June 24. In contrast, value stocks remain attractively priced at a 9% discount.<\/p>\n\n\n\n<p>This disparity suggests that long-term investors may benefit from shifting focus from overextended growth and core stocks to undervalued value stocks.<\/p>\n\n\n\n<h4 class=\"wp-block-heading\"><strong><strong>Sector Analysis and Investment Strategy<\/strong><\/strong><\/h4>\n\n\n\n<p>Given the current market dynamics, we recommend adjusting your investment strategy.<\/p>\n\n\n\n<p>Growth and core stocks have become overextended due to the AI-driven surge, making it prudent to underweight these stocks. In contrast, value stocks present a better margin of safety and potential for future gains, warranting an overweight position.<\/p>\n\n\n\n<p>Additionally, focusing on small-cap and mid-cap stocks is advisable, as these categories offer attractive valuations compared to the increasingly overvalued large-cap stocks.<\/p>\n\n\n\n<p><strong>Specific Sector Opportunities<\/strong><\/p>\n\n\n\n<p>While the broad market shows signs of overvaluation, there are specific sectors with promising opportunities:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Real Estate:<\/strong>&nbsp;Despite negative sentiment, real estate, particularly REITs with defensive characteristics, offers attractive investments.<\/li>\n\n\n\n<li><strong>Energy:<\/strong>&nbsp;The energy sector, trading at a discount, provides a natural hedge against geopolitical risks and persistent inflation.<\/li>\n\n\n\n<li><strong>Basic Materials:<\/strong>&nbsp;Select gold miners and agricultural chemical producers offer value, even in a slowing economy.<\/li>\n<\/ul>\n\n\n\n<p><strong>Shifting Focus to Value Stocks and Small Caps for Better Returns in 2024<\/strong><\/p>\n\n\n\n<p>The concentrated rally in AI stocks during the third quarter of 2024 has sparked worries about market overvaluation.<\/p>\n\n\n\n<p>As we look forward, shifting focus from overvalued growth and core stocks to undervalued value stocks and smaller-cap opportunities may provide better investment returns. Stay informed and strategic to navigate this evolving market landscape effectively.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Key points: The third quarter of 2024 has seen intriguing developments in the US equities market, with attention on the performance of AI-related stocks. As we approach the end of the quarter, investors are questioning whether the AI stock trade has reached its peak. Q3 US Equity Market Boosted by AI-Driven Growth As of June<a href=\"https:\/\/www.vtmarkets.net\/de\/analysis\/ai-stocks-lead-q3-with-value-plays-rising-for-2024\/\" class=\"read-more\">Continue Reading<\/a><\/p>\n","protected":false},"author":2,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[19],"tags":[],"class_list":["post-16682","post","type-post","status-publish","format-standard","hentry","category-analysis"],"acf":[],"aioseo_notices":[],"_links":{"self":[{"href":"https:\/\/www.vtmarkets.net\/de\/wp-json\/wp\/v2\/posts\/16682","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.vtmarkets.net\/de\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.vtmarkets.net\/de\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.net\/de\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.vtmarkets.net\/de\/wp-json\/wp\/v2\/comments?post=16682"}],"version-history":[{"count":0,"href":"https:\/\/www.vtmarkets.net\/de\/wp-json\/wp\/v2\/posts\/16682\/revisions"}],"wp:attachment":[{"href":"https:\/\/www.vtmarkets.net\/de\/wp-json\/wp\/v2\/media?parent=16682"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.vtmarkets.net\/de\/wp-json\/wp\/v2\/categories?post=16682"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.vtmarkets.net\/de\/wp-json\/wp\/v2\/tags?post=16682"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}