**AI’s biggest winners haven’t always been the smartest bets**
The S&P 500’s artificial intelligence index has been on a tear lately, with some of the biggest winners from 2025 to 2026 including companies like Meta AI, Baidu, and Google’s AI-focused subsidiary. But according to ETF Action’s Mike Akins, investors should consider diversifying their portfolios by boosting exposure to underperforming trades.
Akins points out that some of the biggest laggards in the AI space include companies that have been hurt by regulatory scrutiny, high valuations, or declining profit margins. These underperformers, Akins argues, could be poised for a rebound in the coming months.
Under the radar, underperformers
Akins highlights a few groups that have been underperforming compared to the major AI stocks, including:
* **Language processing**: Companies like Nuance Communications, which is a leading provider of language processing technology, have been hurt by declining profit margins and regulatory concerns.
* **Automated driving**: Companies like Alphabet’s Waymo subsidiary, which is a leader in autonomous driving technology, have been impacted by regulatory delays and high development costs.
* **Robotics**: Companies like iRobot, which makes vacuum cleaning robots, have been hurt by high production costs and declining sales.
What this means for investors
Akins’ advice is to consider increasing exposure to these underperforming trades, potentially through the use of ETFs or other mutual funds. This could provide investors with a hedge against the major AI stocks, which may be due for a pullback.
Investors should keep an eye on these underperformers over the next six months, as a rebound could provide significant returns. While it’s impossible to predict the future with certainty, Akins’ advice is worth considering for investors looking to diversify their portfolios and potentially profit from the AI space.
