Capital is rotating out of AI-linked stocks and into insurers, small-cap companies and other sectors that had received relatively little institutional attention. Non-tech US equity funds attracted $62 billion over five weeks in early 2026, exceeding their combined inflows for all of 2025, while hedge funds deleveraged US technology positions at a reportedly record pace. Net selling occurred in six of eight weeks around mid-2026, and hedge fund technology exposure fell roughly 10% from early June. The broader July 2026 de-grossing episode produced severe losses in popular long positions: Goldman Sachs’ Hedge Fund VIP list recorded its worst one-month underperformance against the S&P 500 in more than 20 years, while Situational Awareness LP lost approximately 67% in July as assets fell from roughly $45 billion to about $10 billion. Since June 22, selected software stocks gained about $1.5 trillion while semiconductor companies lost around $2.6 trillion, creating a $4.1 trillion relative-value swing within technology. Insurance stocks reached record highs in late July 2026, and the Russell 2000 small-cap index gained 6% in early 2026 as investors responded to valuations, possible rate cuts and domestic interest-rate sensitivity. The rotation has popularized the HALO label for businesses with lower near-term exposure to replacement by large language models, while insurers’ earnings have also benefited from hard-market pricing dynamics.