Wall Street’s Favorite Stocks Suffer Their Worst Slump Since 2010

Wall Street analysts spent much of 2026 backing companies tied to the artificial intelligence build-out.

Major technology and AI stocks have lost significant market value as investor concerns over AI spending weigh on Wall Street’s most heavily recommended companies. [Photo: NVIDIA Facebook]

However, stocks with the highest share of analyst Buy ratings have underperformed those with the fewest Buy recommendations for most of the year.

The S&P 500 stocks most favored by analysts have trailed the least-favored stocks in a trend that ranks as the third-worst of its kind in Piper Sandler’s data dating back to 1995, according to chief investment strategist Michael Kantrowitz, as reported by Jared Blikre for Yahoo Finance.

“The Sell Side's MOST favored stocks have underperformed their LEAST favored stocks for the majority of 2026,” Kantrowitz wrote in a note to clients on Wednesday.

The divergence became more pronounced during the week as major technology companies reported earnings and renewed concerns about the scale of investment required to support AI development.

Alphabet recorded its largest single-day loss in market value after releasing its third-quarter results, while Intel suffered its steepest one-day share-price decline since 1974.

The Nasdaq also posted its biggest daily drop since June.

According to Yahoo Finance calculations, companies associated with the AI trade lost approximately $5 trillion in market value between October 6 and October 30. The losses included about $1.6 trillion on Friday alone.

Nvidia and Alphabet, both among the stocks favored by Piper Sandler, each shed approximately $835 billion in market value over the period.

The broader market performed differently.

The other 625 large US stocks included in Yahoo Finance’s calculation collectively gained approximately $1.3 trillion, led by companies including Eli Lilly, Walmart and Exxon Mobil.

Piper Sandler’s comparison draws its most- and least-favored stocks from each of the S&P 500’s 11 sectors, rather than simply comparing technology shares with companies in other industries.

Only two previous periods in the firm’s data showed deeper underperformance by analysts’ most-favored stocks: 2001-02, during the collapse of the dot-com bubble, and 2010, as markets recovered from the global financial crisis.

The reversal also affects investors who hold broad-market funds.

Nvidia and Alphabet are among the largest companies in the S&P 500, meaning their share-price declines can weigh on index funds and retirement portfolios that track the benchmark.

Six of the nine stocks on Piper Sandler’s most-favored list were down for the year, including Alphabet, Vistra, Wynn Resorts and Take-Two Interactive.

Nvidia, Arista Networks and Comfort Systems were the exceptions.

Kantrowitz said the shift does not necessarily mean the AI investment theme is over. Instead, he expects investors to become more selective, favoring AI companies with stronger businesses as earnings growth slows.

“We do not expect a return to an AI-driven market led by the most speculative (i.e., lower quality) stocks,” he wrote.