Investors are flocking to the stock market's discount rack
Hannah Erin Lang , The Wall Street Journal Pricey tech heavyweights send some individual investors in search of bargains. Traders on the NYSE floor. Stock pickers aim to find undervalued, and overlooked, potential gems.. Photographer: Michael Nagle/Bloomberg Gift this article
As recently as April, Chase Goodman plowed his extra savings into funds linked to stock-market indexes dominated by the world's biggest technology companies. Lately though, the Detroit-based 29-year-old analyst at an auto company is reading corporate filings and tracking where the shares of companies trade relative to their book value.
As recently as April, Chase Goodman plowed his extra savings into funds linked to stock-market indexes dominated by the world's biggest technology companies. Lately though, the Detroit-based 29-year-old analyst at an auto company is reading corporate filings and tracking where the shares of companies trade relative to their book value.
'I'm looking for companies that are cheap," said Goodman, gushing over two of his recent picks: Photronics, a supplier for chip makers, and consumer-lender Medallion Financial.
No one will ever confuse Medallion for one of the so-called Magnificent Seven tech companies. But after months of trading in response to the latest economic and geopolitical headlines, the mosaic of stocks that comprise the market are beginning to flash their differences. And individual investors like Goodman are taking note, eschewing megacap tech stocks for undervalued, and overlooked, potential gems. Yes, investors and analysts say, it is fun—and possibly rewarding—to pick stocks again.
'It's been this macro story, and most stocks are up having nothing to do with company management or earnings or sales," said Michael Kantrowitz, chief investment strategist at Piper Sandler. 'It has not been a stock picker's market, and I think it will be going forward."
Sky-high valuations on the market's tech heavyweights have left investors in search of less-expensive alternatives. What's more, the Trump administration's trade policies haven't affected all companies the same way, creating winners (and losers) for research-driven investors to discover.
Stocks in the benchmark S&P 500 index are moving less in lockstep now than at any point since February, when the market was still rallying on the results of the 2024 presidential election.
Sam Yocum, 57, watched the rally in big tech stocks and began to grow skeptical that the artificial-intelligence boom that underpinned their rise was fully justified. In recent weeks, he picked up additional shares of power providers Duke Energy and Edison International.
'It's getting this kind of '90s, dot-com bubble feel to it," said Yocum, a California-based private-equity executive. 'I will be looking for other opportunities…the basic, fundamental good-value companies."
He isn't the only one skeptical of richly priced tech stocks like Nvidia, Microsoft and Broadcom, whose shares are looking expensive relative to their earnings. Valuations are high in the broader sense, too: As of Thursday, the S&P 500 was 22.5 times its expected earnings over the next 12 months, according to Dow Jones Market Data, compared with a 10-year average of 18.8.
Analysts note that valuations themselves can't predict market movements, and stocks can trade at high valuations for long periods. 'That being said, this is a massively, massively expensive market," said Lisa Shalett, chief investment officer at Morgan Stanley Wealth Management.
Traders are watching for other signs of market froth as well, including speculation in meme stocks and a cryptocurrency frenzy that has driven the price of bitcoin to records.
Some analysts warn that the recent wave of optimism stands at odds with a number of unresolved risks on the horizon in the latter half of 2025: The specifics of tariff policy aren't yet finalized, and the Trump administration's self-imposed Aug. 1 deadline for striking deals looms. There are also early signs that U.S. policies are lifting the inflation rate, which could prevent the Federal Reserve from making much-anticipated interest-rate cuts later this year.
'Stocks are not showing any fear about tariffs, they're not showing any fear about policy uncertainty related to stability or instability in Washington, they're not showing fear any longer about inflation," Shalett said. 'This is a market that's pricing [in] Goldilocks."
Picking the 'right" stocks might not help investors avoid losses should the market endure a broad selloff. And hunting for bargains remains less popular than chasing the fastest-growing market names: Investors have added $25 billion more than they have pulled from value-oriented stock exchange-traded funds so far this year, according to Morningstar Direct data, compared with about $47 billion of net inflows into growth ETFs.
But some investors are done chasing the crowd. Angel Diaz, a quality systems auditor in Lubbock, Texas, has been trimming his holdings in the Magnificent Seven companies since the start of the year, though they once made up more than half of his portfolio.
Instead the 64-year-old said he is opting for less popular names such as AES, a utility, and Two Harbors Investment, a real-estate investment company he recently purchased for its quarterly dividend.
'I don't want to be dependent on the Mag Seven performing as they have in the past," Diaz said, adding that stability has become more important to him than growth as he nears retirement. 'I'll keep myself invested in the market, but at the same time take a lower-risk approach with less volatility."
It's a good time to be a stock picker, he said, 'if you're doing your research."
Write to Hannah Erin Lang at hannaherin.lang@wsj.com Topics You May Be Interested In Catch all the Business News , Market News , Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
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First Post
6 minutes ago
- First Post
From code to combat: AI-driven drones rewrite battle rules from Op Spider Web to Operation Sindoor
In an insightful conversation with Firstpost, Sai Pattabiram, Founder and CEO of an Indian drone manufacturer company, Zuppa, explained the significance of drones in modern warfare and the challenges that come with it. read more In the span of just a few months, the world witnessed three innovative military operations that changed the dynamics of modern warfare. These missions were: Operation Spider Web, Operation Rising Lion and Operation Sindoor. All these military operations had one thing in common: the use of autonomous drones where AI plays a key role in their trajectories and the actual work of the drones. While the technology has made the war games a level playing field, it has also raised numerous security concerns. In an insightful conversation with Firstpost, Sai Pattabiram, founder and CEO of an Indian drone manufacturer company, Zuppa, explained the significance of drones in modern warfare and the challenges that come with it. STORY CONTINUES BELOW THIS AD Zuppa is a Chennai-based drone manufacturer and seller to the Indian army. Its drones took part in Operation Sindoor India, launched to target nine terror camps in Pakistan and Pakistan-occupied Kashmir (PoK) following the Pahalgam terror attack. Pattabiram explained the tech that makes these drones so vital for various services. 'One needs to understand that a drone is unmanned because an embedded electronic motherboard known as the autopilot has replaced the Human pilot,' he said. 'This autopilot consists of both hardware and software layers that enable a user to use it much like a mobile phone or a laptop. This is called the Cyber Physical Stack of the drone, as shown below: Pattabiram mentioned that it is the electronic layer where the automation and AI drone technology are usually built. 'The evolution of drone tech in terms of deployment that has been witnessed across conflicts globally, from Operation Sindoor to Operation Spider Web and everything in between, has been in these layers,' Pattabiram told Firstpost. 'The technology life cycle of innovation happening in this layer has dropped significantly to 8 – 10 weeks. Thus, indicating an innovation in drone use happening every 2-3 months. Much of this evolution that has been witnessed today has been in these layers,' he said. Pattabiram emphasised that the future of drone technology will be its ability to adapt quickly. STORY CONTINUES BELOW THIS AD From delivering groceries to delivering bombs In the span of just a few years, there has been an evolution in how drones are being used. From delivering items one purchased online to dropping bombs and turning into suicide bombers. While speaking on the evolution of the use of drones, Pattabiram emphasised that the dual-use technology can deliver anything, be it food or bombs. 'Initially, drones' dual-use technology was not given enough care across the world, not only in India. Nobody looked at it as a dual-use technology. They all looked at it as separate military applications and separate civilian applications,' he told Firstpost. However, Pattabiram also pointed out how these drones can be used by terrorists, raising a security concern. 'Civilians, military and terrorists can use the same thing for three very different purposes. Like a farmer can use a drone for spraying pesticides or nutrients. The military could use it to use a drone to ship material from point A to point B, and the terrorists could use it as a kamikaze mode or even as a bomb dropping,' he said. 'So this dual-use nature of drones is what is now turning out to be a kind of revolution for most of the people in the security apparatus or the security organisations. And this all started primarily with Ukraine using FPV drones.' STORY CONTINUES BELOW THIS AD Zuppa's Kamikaze Micro Drone Ajeet Mini. Image Source: Zuppa 'Now, FPV drones today are known as kamikaze drones. Today we know it as drones which can damage lethally, which can deliver lethal blows, like Operation Spider that happened recently. But FPV drones were never intended to be this,' he explained. 'FPV drones were racing drones. There is an FPV racing league and Ukraine and Russia, both countries, that practically use FPV, flyers, people who do drone racing to fly these drones into war. Drones as Dual-use technology weren't expected and weren't something people thought of,' he added. Ukraine Operation Spider Web: The concerns & opportunities On June 1, 2025, Russia was rocked by a drone attack on its key military infrastructure. Ukraine eventually announced that after over one and a half years of planning, they had conducted what they called 'Operation Spider Web'. In the mission, Ukraine used a whopping 117 drones to strike the Russian airfield. What was shocking was the fact that the strikes were conducted 600 kilometres away from the battleline and 1,000 kilometres away from the Ukrainian border. While speaking to Firstpost, Pattabiram noted that this was the 'first time we saw the use of the remote operational capabilities of the drone.' He also mentioned how Elon Musk's Starlink played a crucial role in the operation. 'While Kamikaze drones themselves haven't changed much since their first use in the Ukraine-Russia war, it's their evolution in terms of deployment that has been changing modern warfare. Like Operation Spider Web was a very innovative use of Kamikaze drones way inside enemy lines,' he said. STORY CONTINUES BELOW THIS AD Ukraine's Security Chief Briefs President Zelenskyy on Operation Spider's Web. Image: X/@ZelenskyyUa However, he also stated that the 'true impact of Operation Spider Web is not only on Russia, but it is on the entire global security ecosystem, given the scale and asymmetry of damage it has inflicted in terms of cost and operational preparedness'. 'This operation has galvanised the former Indian Army Chief to state that the Entire Country is now a battlefield thanks to the scale of this operation,' he said. Not something new Another point on which Pattabiram emphasised was the fact that 'such a kind of operation has not happened in India. 'In India, if you see, we have had the Jammu air base attack in 2021. Which again was possibly by a locally operated drone. Possibly even locally assembled using locally available material. Means material within India,' he said. 'So the Operation Spider Web has woken up the security apparatus across the world. This Operation is going to change the way people look at drones. The way people operate drones in war as well,' he said. Open source code and the risks of hijacks One of the key aspects of the Operation Spider Web is the fact that Ukraine used open-source codes to develop the drones that ultimately struck the Russian airfield. However, if the easily available codes fall into the wrong hands, the impact would be detrimental. While raising concerns over the matter, Pattabiram recalled the hijacking of an Indian drone back in August 2024. 'The drone was taken over on the 23rd of August 2024 by Pakistan, and it's not like that was the first time it's happened, it's happened before as well. A lot of this can be directly attributed to the use of open source code,' he said. STORY CONTINUES BELOW THIS AD SBU chief Lt. Gen. Vasyl Maliuk is standing beside a schematic map of the operation. @SBUkr 'The code layer of a drone is where the vulnerability of hacking or the vulnerability of misuse lies. The code can be downloaded from GitHub, and it can be used, and the commands can be directly given to the drone to hack. So, considering this open-source code is a major risk from a security perspective,' he explained. The need for a regulatory framework When asked how the risk can be tackled, Pattabiram suggested innovative ideas. 'The key is that there is a lot of learning that is possible from the telecom sector. Chinese phones that were sold here without IMEI numbers. Which meant there was no traceability of the phone. So they could be misused for various things, and nobody knows where it is. Now, today the drone is in the same status. Despite the civilian drone regulation having been in place since 1921. For the last 4 years, nobody knows where a drone is operating or who is operating,' he averred. 'So, considering this, DGCA has a digital sky on which you can register a drone. But there is something beyond the online portal on which you register, and you get one thing called a UIN number. So the regulatory framework has a very simple thing to be done, i.e. using the telecom as a learning point.' 'So all they need to do is completely stop the import of autopilots and then introduce SIM cards into every autopilot in India. So that every SIM card has an IMEI number. And it has an IMEI number, which is your subscriber number. This way, you can trace the drone from the telecom network to where it is. Who is operating it, and the moment you have got the IMEI number, and you have done a KYC for it, you know who owns the drone,' he said. STORY CONTINUES BELOW THIS AD When it comes to imported autopilots, Pattabiram said that those drones need to be controlled. 'It should not be an open item. A drone autopilot cannot be imported under OGL or a general licence. There should be specific people who are allowed and authorised to import it based on licensing. And the second is that all autopilots need to have a SIM card on them. If this is done, then I think one can get rid of a lot of problems. The first drone war in South Asia: India-Pak conflict While the Indian and Pakistani military clashed with each other on numerous occasions, the conflict that erupted following the devastating Pahalgam attack saw drones taking the centre stage. 'Operation Sindoor was the first time a totally non-contact remote war played out in the subcontinent, with neither side crossing either the IB or the LOC. This was possible primarily on account of the deployment of remote technologies like drones and missiles,' Pattabiram said. 'Having said that, it is important to note the fact that the small drone war has been happening even before Operation Sindoor, with Pakistan violating lower-level Indian airspace over the past couple of years, every day by sending hundreds of drones to deliver drugs, small arms, explosives, etc. This war is interestingly continuing even after May 10th 2025.' A debate will take place in the Upper House of Parliament over India's Operation Sindoor. Representational Image 'The importance of addressing and building capabilities for this particular type of low intensity, dispersed, highly asymmetric war is one of the biggest learning's from Operation Sindoor. This is exactly the kind of warfare that is stretching out the Ukraine-Russia war for over three years now. The Israel-Iran war and the Israel-Houthi wars are other such conflicts that are stretching out. The result of such stretched-out, open-ended conflicts can be both costly and debilitating to the economies of the countries involved,' he said. STORY CONTINUES BELOW THIS AD Pattabiram emphasised that India needs to build capabilities and abilities to block enemy drones from coming to India. Mentioning how Pakistan often uses drones to send drugs within the Indian borders, he called for finding ways to neutralise these threats. A general view of a damaged portion of a building, after it was hit by an Indian strike, in Muridke near Lahore, Pakistan, May 7. Jain played a big part in Operation Sindoor. Reuters AI & Drones During the conversation with Firstpost, Pattabiram noted that AI automation is going to be the future of drones. 'The question of trying to operate them manually is not going to be feasible. The skill level required to fly this kind of FPV drone takes years for somebody to build into that kind of capability. Due to this, it is not scalable as well,' he said. 'It needs to be AI-based. It needs to have self-autonomous capabilities, which do not exist. But looks like many of the countries and many of the companies, including us, are also working along those lines in terms of autonomous AI and Machine learning is being infused into drones,' he asserted, emphasising that the integration of AI and drones is an 'unavoidable future'. So, the swarm drone concept is another concept that is going to be very, very strong going forward. The only thing that you will see grow going forward is the technology content, and the way the technology is used is going to start scaling very well,' he said. Operation Rising Lion: Are drone bases new sleeper cells? After Israel conducted Operation Rising Lion against Iran's nuclear facilities, it was revealed that Mossad had drone bases within Iranian territory. It was from these bases that they activated the drones and conducted the strikes on military and nuclear facilities in Iran. While talking about the operation, Pattabiram compared setting up drone bases within enemy territory to setting up sleeper cells or deploying terrorists on foreign land. 'It is more on the lines of a terrorist operation. So it is like you are having terrorists within the country, within the enemy country, and you are operating those sleeper cells,' he said. 'In some ways, it is very similar to a sleeper cell concept. And that is exactly what Ukraine and Israel, or Mossad, did. They have activated certain existing assets in terms of people within the other country. This is very, very similar to what has been happening in India. In terms of Pahalgam, or in terms of Patankot or in terms of Bombay, 26-11. Now, in the terrorist case it is human, in this case it is a drone. But the basic concept is the same,' he said. Pattabiram emphasised that the only way to counter these attacks would be the same way one works on counter terrorism measures. 'So it is a counter terrorism and counterinsurgency kind of scenario that has to be used for something like this. Now, one of the ways of figuring it out is controlling the availability of material to be able to activate these things. And the second is legitimacy in terms of seeing who is using this material, who is buying this material,' he explained. Are drones replacing battle tanks? Over the decades, the rules of warfare have evolved significantly. From the use of horses to battle tanks. Then missiles came into play, making countries target each other irrespective of the distance. However, the three operations that rocked the world in the span of a few weeks beg one question: Are drones replacing battle tanks? When Firstpost asked this question, Pattabiram said drones are being used for the first time as a 'de-escalatory asymmetric'. 'When a war moved from a horse to a tank, the tank was far more expensive than a horse. But still, people took it because it offered certain strong advantages over a horse. When it moved from propeller planes to jet planes, jet planes were far ahead of propeller planes in terms of capabilities. So even though it was higher in terms of cost, people adopted it because it delivered asymmetric impact to the forces,' he explained. When bombs evolved into missiles, a similar kind of asymmetry happened where the cost escalated, but the impact also escalated. But drones are the first time in the history of warfare where it has gone the other way around. Where the cost has reduced, but the impact has increased.' 'So, thereby enabling larger deployment of drones, covering larger areas and being cost-effective, they are a de-escalative asymmetry which delivers a higher impact,' he added. To support his assertion, Pattabiram gave an example of how to take down a tank with millions of dollars of Russian bombers, Ukraine just used $2,000 drones. 'So, where this also plays is now if somebody were to use missiles to stop drones, then you are stopping a $2000 drone with a $2 million missile. When it comes to that kind of equation, it can bleed a country,' he said. Can drones be a deterrent in war as nuclear weapons have been? When asked if drones can be given the same stature as nuclear weapons for deterrence in war, Pattabiram emphasised that while drones can be solid levellers, they are not deterrents and the impact is not as significant as a nuclear weapon. 'The drones are turning out to be more of irritants and more of psychological players, rather than being something like an impact player, like nuclear weapons,' Pattabiram said. 'Nuclear weapons have more of an impact as a deterrent. Whereas drones are turning out to be more than something, they start affecting people psychologically as well as people, keep irritating and chipping away.' 'So nuclear is something like, one hard bang. This is something that gives a thousand cuts. So, drones and nuclear weapons can't be compared to that extent; one is kind of destructive in one shot. So there is a difference between the two,' he concluded. While drones might not be as lethal as nuclear weapons, one thing remains clear: they will be at the centre stage of modern warfare.
Hindustan Times
6 minutes ago
- Hindustan Times
OpenAI CEO teases launch of new AI models and products in coming months
It is almost the time of year when tech giants will start announcing new technologies, products, and services. As we wait for the big AI revelation, OpenAI CEO Sam Altman has teased upcoming launches that will include AI models, products, new features, and more. The indication of the upcoming launch gives hope for OpenAI's new generation AI model, the GPT-5, for which we have been waiting for quite a long time. While Altman did not reveal any specific details about the launch, he simply showed excitement and nervousness with a short warning for small hiccups during the transition. OpenAI has planned to launch new AI models, products and features in the coming months.(Bloomberg) Also read: OpenAI prepares to take on Google Chrome with AI-driven browser, launch expected in weeks OpenAI's new AI model and products launch Sam Altman, OpenAI CEO, shared a post on X (formerly Twitter), revealing that it's launching several things in the coming months. From new AI models, features, to products, the company have several new things planned before the end of 2025. The post said, 'We have a ton of stuff to launch over the next couple of months,' creating curiosity over what the company has planned and what new will be announced. The post further cautions for some hiccups that could come along the way to introduce models and products. Altman said, 'Please bear with us through some probable hiccups and capacity crunches.' Earlier, when OpenAI launched GPT-4o's image generation capabilities, ChatGPT experienced a major system overload, causing a delay in several functionalities. But he also assures fans that the upcoming launches will be exciting. Also read: Samsung Experience Meet Powered by Aditya Vision Limited Unfolds a New Era of Technology in East India As of now, the company has not revealed its launch plan, but with the post, we have greater hopes for the GPT-5 model, which will potentially enhance the capabilities of ChatGPT. This new generation AI model is expected to bring multimodal capabilities while enhancing the ability to carry out complex tasks. Despite the suspense, OpenAI is expected to launch a flagship model with GPT 5, along with a mini and nano version. This new model is also expected to get OpenAI a step closer to Artificial General Intelligence (AGI). Previous reports have suggested that OpenAI is targeting an early August launch; however, no official information has been shared so far. Therefore, we may have to wait a few more weeks and keep an eye on the latest developments to know what AI advancements we can expect this year. Mobile Finder: Google Pixel 10 Pro LATEST specs, features, and price
Business Standard
6 minutes ago
- Business Standard
Nifty above 24,600 level; metal shares in demand
The key equity benchmarks traded with minor gains in the morning trade. The Nifty traded above the 24,600 level. Metal shares advanced after declining in the past three consecutive trading sessions. At 10:30 IST, the barometer index, the S&P BSE Sensex, advanced 96.16 points or 0.12% to 80,696.07. The Nifty 50 index added 55.75 points or 0.23% to 24,621.55. In the broader market, the S&P BSE Mid-Cap index gained 0.22% and the S&P BSE Small-Cap index rose 0.06%. The market breadth was positive. On the BSE, 1,947 shares rose and 1,705 shares fell. A total of 215 shares were unchanged. Earnings Today: DLF (up 0.66%), Siemens Energy India (down 0.81%), Bosch (down 0.75%), Marico (up 0.33%), Shree Cement (down 0.19%), Aditya Birla Capital (up 2.01%), Godfrey Phillips India (up 0.37%), Aurobindo Pharma (up 0.31%), Tata Investment Corporation (down 0.08%), Escorts Kubota (up 0.12%), Sona BLW Precision Forgings (up 1.26%), Bharti Airtel (up 0.51%), Tata Motors (up 0.80%), Life Insurance Corporation (LIC) (up 1.01%), Bombay Stock Exchange (BSE) (up 0.65%), Trent (up 0.40%), DFL (up 1%), and Titan Company (up 0.69%) will announce their quarterly earnings later today. Buzzing Index: The Nifty Metal index gained 1.72% to 9,258.60. The index fell 1.61% in the past three consecutive trading sessions. Steel Authority of India (up 3.09%), Jindal Steel & Power (up 3.07%), Tata Steel (up 2.34%), NMDC (up 2.28%) and National Aluminium Company (up 2.15%), Jindal Stainless (up 1.99%), Lloyds Metals & Energy (up 1.96%), Hindalco Industries (up 1.86%), JSW Steel (up 1.45%) and Hindustan Copper (up 0.97%) advanced. On the other hand, Welspun Corp (down 1.31%), edged lower. Stocks in Spotlight: Baazar Style Retail surged 9.38% after the company reported a consolidated net profit of Rs 2.05 crore in Q1 FY26 compared with a net loss of Rs 0.42 crore in Q1 FY25. Revenue from operations jumped 37.01% YoY to Rs 377.85 crore in Q1 June 2025. Honeywell Automation India slipped 4.12% after the companys standalone net profit declined 8.71% to Rs 124.60 crore in Q1 FY26, compared with Rs 136.50 crore in Q1 FY25. However, revenue from operations jumped 23.18% year on year to Rs 1,183.1 crore in Q1 FY26.
