A market rotation is underway and Technology stocks are in the crosshairs. Less than half of stocks with the S&P 500 Technology Index are trading above their 200-day moving average. The performance divergence between Semiconductor and Software stocks has been closely followed, with Semis holding strong while Software getting hammered.
Consequently, this bifurcation in Technology stocks has led to almost 25 year highs in the difference between the best returning Tech stock and the worst returning Tech stock.
We believe the widening dispersion within Technology reflects a reassessment of who will ultimately emerge as AI winners and who may fall behind. A once broad AI trade is becoming increasingly selective. Investors are rotating toward companies perceived as strengthening their competitive positioning while others face heightened scrutiny.
Claude vs. ChatGPT
Leadership within generative AI appears to have shifted. ChatGPT is no longer widely perceived as the “best model” across the ecosystem. Alphabet’s Gemini has scored higher on key industry benchmarks, while Anthropic’s Claude models have rapidly improved their reasoning and coding capabilities. Competitive positioning within AI is evolving quickly.
Performance reflects this shift.
From 10/28/2025 through 2/20/26, the Anthropic Stock Basket has advanced 37.4%, while the ChatGPT Stock Basket has declined by 26.0%, a 63% spread. Through the lens of price action, investors appear to be reallocating capital toward perceived AI winners and away from names viewed as losing relative leadership.
The divergence is not limited to price action. Earnings revisions over the next year show Anthropic-adjacent companies seeing upward estimate momentum, while ChatGPT-adjacent stocks have experienced stagnation or downward revisions. The dispersion in price action appears to be reinforced by fundamental dynamics.
A regime shift appears to be underway among generative AI stocks.
Capturing the Value of Memory Stocks
The implications of this regime shift extend beyond the (large-language model) LLM developers. The theme has broadened from mega-cap platforms to the infrastructure layers that enable AI at scale.
Memory, in particular, has emerged as a critical component of the AI buildout. As models grow more complex and inference workloads expand, demand for high-bandwidth memory and advanced storage solutions continues to increase. Scaling large language models is not just a compute story, but a data movement and memory story as well.*
In a market that has become more selective and volatile beneath the surface, exposure across multiple layers of the AI stack may prove more resilient than concentrating in a single lane.
*To read more about AI’s next bottleneck, click here: https://blog.roundhillinvestments.com/the-memory-wall
Companies at Risk of AI Disruption
Due to the agnostic application of AI tools, the list of companies at risk of AI disruption is growing with each new breakthrough. Indicative of their struggling price action in 2026, software stocks are merely the latest casualty of this reality.
The Goldman Sachs AI At Risk basket consists of equities that are most exposed to disruption from the development of new technologies in artificial intelligence due to automation, growth risk, or increased competition. Software makes up roughly a third of companies at risk of AI disruption. Consequently, companies at risk have lagged behind the S&P 500 by a wide margin. Since the end of 2024, the GS AI at Risk Index is down -32.8% versus the S&P 500’s +16.3% return.
Software may be the latest pressure point, but the competitive landscape is still evolving. Each new breakthrough raises the stakes for those currently leading the generative AI race.
Minimax & Knowledge Atlas: AI’s Latest Disruptors
Emerging model developers such as MiniMax (100 HK) and Knowledge Atlas Technology (2513 HK) may represent the next wave of global disruption in artificial intelligence. Recent model releases, including MiniMax’s M2.5 and Knowledge Atlas’ GLM series, demonstrate how open-weight and domestically developed systems are approaching state-of-the-art results in coding, reasoning, and agentic workflows, while in some cases challenging the cost structures of leading proprietary platforms. Together, these firms underscore how rapidly the frontier model landscape is evolving, with new entrants reshaping perceived leadership.
Notably, the market appears to be endorsing this shift. Shares of MiniMax have rallied more than 480% since the company’s IPO. Knowledge Atlas Technology has also seen significant price movement, with shares up 520% since its own IPO a day earlier, underscoring how investors are actively reassessing the prospects of emerging AI model developers. The magnitude of these moves suggests the market views recent model advancements as more than incremental progress.
Whether MiniMax or Knowledge Atlas ultimately claims the title of “best LLM” remains to be seen, but the reaction underscores a broader point: the next phase of the AI arms race may be defined not just by model quality, but by accessibility, efficiency, and the willingness to challenge the incumbents.
CHAT: Positioning Throughout the AI Stack
The widening dispersion across generative AI stocks reflects more than sentiment. Price action and earnings revisions suggest competitive positioning is being actively reassessed. Leadership is no longer concentrated in a single model or platform, and the infrastructure required to scale AI is becoming just as important as the models themselves.
The Roundhill Generative AI & Technology ETF (CHAT) is positioned to reflect this evolution in the AI ecosystem. As of 2/23/26, memory stocks represent 13.48% of the portfolio, with the three largest memory holdings (SK Hynix, Samsung and Micron) comprising 11.48%, underscoring the growing importance of high-bandwidth memory in the AI buildout. The portfolio also includes exposure to emerging challengers, including a combined 8.5% allocation to MiniMax and Knowledge Atlas, which may represent the next phase of disruption within the generative AI ecosystem.
As the AI landscape continues to evolve, an actively managed investment approach could be critical in ensuring participation across both infrastructure and innovators.
*As of 2/23/2026, the companies mentioned in this article are fund holdings. To learn more about CHAT and see a list of the ETF’s top 10 holdings with complete holding information, please visit www.roundhillinvestments.com/etf/CHAT. Fund holdings are subject to change. The companies mentioned herein are not to be considered a recommendation to purchase or sell.
Glossary
The S&P 500® Information Technology Index comprises those companies included in the S&P 500 that are classified as members of the GICS® information technology sector.
Investors should consider the investment objectives, risk, charges and expenses carefully before investing. For a prospectus or summary prospectus with this and other information about Roundhill ETFs please call 1-855-561-5728 or visit the website at www.roundhillinvestments.com/etf/. Read the prospectus or summary prospectus carefully before investing.
Artificial Intelligence Company Risk. Companies involved in, or exposed to, artificial intelligence related businesses may have limited product lines, markets, financial resources or personnel. These companies face intense competition and potentially rapid product obsolescence, and many depend significantly on retaining and growing the consumer base of their respective products and services.
Technology Sector Risk. The Fund will invest substantially in companies in the information technology sector, and therefore the performance of the Fund could be negatively impacted by events affecting this sector. Market or economic factors impacting technology companies and companies that rely heavily on technological advances could have a significant effect on the value of the Fund’s investments. The value of stocks of information technology companies and companies that rely heavily on technology is particularly vulnerable to rapid changes in technology product cycles, rapid product obsolescence, government regulation and competition, both domestically and internationally, including competition from foreign competitors with lower production costs.
New Fund Risk. The Fund is a recently organized management investment company with no operating history. As a result, prospective investors do not have a track record or history on which to base their investment decisions. Small-Capitalization Investing. The securities of small-capitalization companies may be more vulnerable to adverse issuer, market, political, or economic developments than securities of large- or mid-capitalization companies. The securities of small capitalization companies generally trade in lower volumes and are subject to greater and more unpredictable price changes than large- or mid-capitalization stocks or the stock market as a whole.
Micro-Capitalization Investing. Micro-capitalization companies often have limited product lines, narrower markets for their goods and/or services and more limited managerial and financial resources than larger, more established companies, including companies which are considered small- or mid-capitalization.
Concentration Risk. The Fund will be concentrated in securities of issuers having their principal business activities in the technology group of industries. To the extent that the Fund concentrates in a group of industries, it will be subject to the risk that economic, political, or other conditions that have a negative effect on that group of industries will negatively impact them to a greater extent than if its assets were invested in a wider variety of industries.
CHAT is distributed by Foreside Fund Services, LLC.
