Where Value Remains in a Crowded AI Market

RiverFront Investment Group’s June 2026 Intrinsic Value analysis finds many recent AI IPOs and AI model providers trading at prices that exceed what realistic earnings scenarios can support, while hyperscalers, selected semiconductor makers and data‑center infrastructure firms may present buying opportunities if projected earnings materialize. The report cites weekly data through June 24, 2026.

The report lays out a four-step Intrinsic Value process. Analysts assess the macroeconomic backdrop, evaluate a company’s competitive position and likely earnings, identify specific catalysts and disconfirming evidence, and compare current valuations with probable future earnings to decide whether to add, hold, trim or exit positions.

RiverFront groups the AI trade into five themes. The first covers AI model providers and several recent IPOs, which the report labels as companies with strong narratives but limited earnings history. The report states their market values depend on high future growth that may take years to appear and that sentiment-driven price discovery increases downside risk if expectations change.

The second theme focuses on hyperscalers and semiconductor firms. The report notes many companies in this group have shown consistent revenue growth and strong earnings guidance. RiverFront also notes that in some cases share prices have begun to outpace earnings growth and that volatility is likely, making security selection and position sizing important.

The third theme covers firms that supply physical infrastructure for AI, including industrial components, utilities and providers of power and cooling for data centers. The report points to structural supply constraints and long lead times for adding power and transmission capacity as reasons the earnings case is tangible, while identifying exposure to macro credit and rate shocks and potential shifts in hyperscaler capital spending as risks.

The fourth theme addresses software incumbents facing early AI disruption. RiverFront reports many of these firms have been de‑rated on disruption fears, but says current management guidance and analyst estimates have not yet shown a broad earnings slowdown. The report adds that a sustained decline in earnings expectations or a pattern of misses would validate the disruption thesis.

The fifth theme examines non‑technology enterprise adopters in industrial, healthcare and consumer sectors. RiverFront reports anecdotal examples of AI improving margins or revenue but says aggregate earnings data do not yet show broad margin expansion. The report notes some layoffs attributed to AI may reflect earlier overhiring.

The report emphasizes that intrinsic value is an ongoing assessment rather than a one‑time screen and that active management allows rotation between growth and value exposures as macro or earnings data change. It reiterates general investment risks, including market volatility, interest‑rate sensitivity for fixed income and the possibility of principal loss.

The report is authored by Adam Grossman. RiverFront’s commentary reflects its views as of the publication date and is not individualized investment advice.