Analysts’ top S&P 500 picks trail least-recommended stocks by 13%

Piper Sandler found Wall Street analysts’ most recommended S&P 500 stocks trailed the least recommended group by about 13% in 2026, Dünya Gazetesi said in an Oct. 31 news report.

The gap reached the third-worst level in Piper Sandler data since 1995, while Yahoo Finance calculations put AI-and-chip market-value losses at about $5 trillion since Oct. 6.

AI losses dominate

Michael Kantrowitz, Piper Sandler’s chief investment strategist, said the performance split was exceeded only in 2001-2002 and in 2010 in the firm’s records, Dünya reported. The comparison covers the most and least recommended stocks in each of the S&P 500’s 11 sectors, rather than technology alone.

Yahoo Finance calculated that 47 artificial-intelligence and chip-related stocks lost about $5 trillion in aggregate market value from Oct. 6, Dünya reported. About $1.6 trillion of that decline occurred on Friday.

Nvidia and Alphabet each lost about $835 billion in market value over the period, Dünya reported. SpaceX lost about $505 billion and TSMC lost $395 billion, while 625 other large U.S. companies gained about $1.3 trillion in combined value.

That split matters because it puts weakness in AI-linked companies against a broader U.S. equity market that was not uniformly selling off. Eli Lilly, Walmart and Exxon Mobil were among the companies Dünya named as contributors to the gains outside the AI-and-chip group.

The Piper Sandler work also complicates the usual reading of analyst consensus. A buy recommendation is an analyst’s positive view on a stock, but the ranking measures relative performance; it does not show that the recommendations caused the underperformance.

Favorites lose ground

Six of the nine companies in the most recommended group lost value this year, Dünya reported. Alphabet, Vistra, Wynn Resorts and Take-Two Interactive were among the decliners, while Nvidia, Arista Networks and Comfort Systems rose.

Most of the least recommended stocks gained, with Kenvue and Illinois Tool Works named as standouts. Even so, the least recommended group’s overall performance was close to the S&P 500, Dünya reported, meaning the gap was driven more by losses in the favored names than by unusually strong gains in the unpopular group.

The reversal followed an earlier advance. Dünya reported that analysts’ favored stocks had risen nearly 18% on average in the spring before concerns over AI spending, costs and profitability grew later in the year.

The selling began in companies tied to data-center investment and then spread to large technology companies, Dünya reported. Alphabet’s market-value loss after third-quarter results was followed by selling in Amazon and Intel shares.

Kantrowitz said the period of gains in speculative AI stocks with high volatility may have ended. He also said the selloff did not mean AI investment opportunities had disappeared.

His view, as described by Dünya, is that slowing profit growth may push investors toward companies whose shares have fallen but whose operations appear stronger. Kantrowitz said he did not expect the most speculative and lower-quality AI stocks to lead the next phase of market gains.