Value ETFs Quietly Ride the AI Wave in 2025
Value funds are beating growth ETFs this year, but many carry hidden exposure to artificial intelligence stocks.
Value exchange-traded funds are outpacing their growth counterparts in 2025, yet a closer look under the hood reveals that many of these so-called traditional funds carry significant exposure to the artificial intelligence boom that has defined markets in recent years. The apparent split between value and AI investing may be far narrower than most retail investors assume.
The overlap stems from the way major value ETFs weight their holdings. Several large-cap technology companies that have become central players in AI infrastructure — cloud platforms, semiconductor manufacturers, and enterprise software firms — now screen as value stocks by classic metrics such as price-to-earnings and price-to-book ratios, having matured well beyond their early hypergrowth phases. That reclassification quietly drags AI exposure into funds that market themselves on old-economy principles.
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For investors who rotated into value funds specifically to reduce their AI risk or diversify away from the Magnificent Seven trade, this dynamic raises important questions about whether their portfolios are actually as hedged as they believe. Sector overlap between value and growth benchmarks has grown meaningfully, blurring the traditional boundaries that once made the two styles reliable counterweights to each other.
The trend also complicates the narrative around AI as a purely speculative growth theme. If blue-chip AI names are now appearing in value screens, the market may be signaling that it views at least some artificial intelligence infrastructure buildout as a durable, cash-generating business rather than a momentum story. That is a meaningful shift in how Wall Street categorizes the technology cycle.
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