AI investing is entering a reckoning. According to Nigel Green of deVere Group, markets are shifting from hype to proof as AI stocks slide despite record highs elsewhere. Investors now demand clear earnings, disciplined spending, and credible timelines. 2026 will reward execution, profitability, and geopolitical awareness, not open-ended capital expenditure or ambition alone. Verification replaces assumptions across technology leaders globally.
A major reassessment of artificial intelligence investments is now underway, setting the tone for how markets will behave through 2026. According to Nigel Green, Chief Executive of deVere Group, investors are entering what he describes as a decisive period of verification, where ambition alone no longer sustains valuations.
This warning comes as AI-related stocks continue to weaken in early trading, extending losses for a third consecutive session. The pullback highlights a growing divide between technology-linked equities and the broader market, even as major indices reach record highs.
AI Stocks Fall as Broader Markets Rise
Recent trading sessions underline this divergence. Oracle falls again in premarket trading, while Nvidia and Micron also register declines. CoreWeave continues to slide, adding to the pressure across the AI segment.
The weakness follows a sharp sell-off after Oracle reports earnings that miss expectations, ending the previous session down roughly 11%. The impact spreads quickly across AI-linked names, despite strong performance elsewhere in the market. Both the Dow Jones Industrial Average and the S&P 500 close at fresh records, while the Nasdaq Composite slips.
Nigel Green states: “The divergence marks the beginning of a defining shift that will shape investor behaviour well beyond next year.”
From Growth Narratives to Earnings Reality
AI has been a key driver of equity performance over the past two years. That phase is now changing. Nigel explains: “Markets are drawing a clear line. AI has driven equity performance for two years, but 2026 will be about verification. Investors are now demanding more evidence that vast spending programmes translate into durable earnings.”
He adds: “The tolerance for assumption has ended.”
Oracle’s earnings miss, combined with the scale of its investment commitments, prompts investors to reassess how long they are willing to wait for returns. This reassessment is not isolated. It ripples through the wider AI ecosystem, accelerating a rotation away from high-cost technology plays toward sectors offering clearer visibility on cash flows.
A Repricing of Certainty, Not a Rejection of AI
Despite the sell-off, the shift does not signal a loss of confidence in artificial intelligence as a technology. Instead, Nigel clarifies: “What we’re seeing is not rejection of AI. It’s a repricing of certainty. Capital is moving toward businesses where revenues, margins and balance sheets are easier to forecast. AI leaders are now being judged on execution rather than ambition.”
After years in which enthusiasm supports premium valuations, investors now focus on operational discipline, capital efficiency, and profitability. Open-ended capital expenditure no longer finds easy acceptance without a clear and credible return timeline.
Execution Becomes the Deciding Factor
Investor expectations continue to tighten. Nigel notes: “Investors are no longer prepared to fund open-ended capital expenditure without a convincing timeline for returns.”
He adds: “The question investors are asking has changed. It’s no longer how big AI can become. It is how efficiently companies can convert infrastructure, data and computers into profit. Those that cannot articulate that pathway will struggle to justify their valuations in 2026.”
This shift creates increasing dispersion within large technology names. Some companies demonstrate tighter spending control and clearer links between AI deployment and earnings growth. Others face resistance as shareholders challenge rising costs and uncertain payoff periods.
Selectivity Replaces Concentration
The current market behaviour signals a broader reassessment of concentration risk. Nigel explains: “This is why the market reaction matters. When the Dow and S&P 500 are hitting records while AI stocks are falling, it tells you investors are making deliberate choices. Concentration risk is being reassessed, and selectivity is becoming decisive.”
Even as headline indices continue to rise, investors are increasingly selective about which AI strategies deserve capital.
Governance, Policy, and Geopolitics Add Pressure
The implications extend beyond earnings and balance sheets. Artificial intelligence now sits at the centre of corporate strategy across industries, but boards and executives face growing pressure to demonstrate restraint, prioritisation, and measurable outcomes.
Nigel states: “2026 will reward companies that show control. Spending must align with revenue potential, growth plans must be credible, and profitability has to move in step with ambition. Markets will not accept divergence for long.”
Policy and geopolitical considerations further complicate investment decisions. With President Donald Trump shaping the current US policy agenda, export controls, domestic supply-chain priorities, and national security concerns increasingly influence corporate planning. These factors now feature more prominently in valuations and forward guidance.
“Investors are examining strategy through a wider lens,” Nigel says. “They are looking at how companies manage geopolitical constraints alongside commercial goals. The ability to adapt investment plans without sacrificing profitability will be essential.”
A Maturing Market for Artificial Intelligence
As markets recalibrate expectations, one conclusion becomes clear. The AI sector is not losing relevance, but it is entering a more disciplined and demanding phase.
Nigel concludes: “AI remains transformative, but the market is maturing.”
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