By Simon Mugo
Publication Date: 2026-02-28 00:54:00
The quantitative strategies that have guided trillions of dollars of global capital are facing a historic identity crisis. As artificial intelligence transforms the economic landscape, long-standing definitions of “safe” and “expensive” stocks are being upended.
In February, the Quality factor, typically favored by high-margin companies like Microsoft Corporation (NASDAQ:MSFT), lagged its Value counterparts by more than 5 percentage points. This represents the worst underperformance of quality-indexed stocks in five years.
This shift comes as investors become increasingly wary of companies whose high valuations were once protected by large competitive moats. There is growing fear that AI could bridge these moats overnight and render outdated software and service-based business models obsolete.
As a result, professional asset managers are shifting away from “future growth technologies” and toward “here and now” fundamentals. Companies with physical infrastructure, like Coca-Cola…
