Skip to navigationSkip to main contentSkip to right columnRiverFront Investment GroupThu, July 2, 2026 at 5:15 PM GMT+2 13 min readThis article was originally published on ETFTrends.com.SUMMARYOur 'Intrinsic Value' framework helps us to avoid overpaying for growth or falling into value traps.In the AI trade, price appreciation has outrun earnings for some names — and lagged badly for others.While prices for recent IPOs are likely too high, there remain buying opportunities in AI-related stocks, in our view.After a wild last 12 months in a technology stock boom - and more recent volatility - the question du jour, in our view, is not whether AI is transformative. The significant increases in economic productivity and huge corporate cash flows generated by AI-related hardware companies confirm this, as both have accelerated since the release of Chat-GPT in late 2022. Across the Technology sector, we are seeing the most optimistic cash flow outcome from our 2026 Outlook come to pass so far this year.[caption id="attachment_649843" align="aligncenter" width="600"]chart tech cash flow Source: LSEG Datastream, RiverFront; data weekly as of 6/24/26. Chart shown for illustrative purposes only. Past performance is no indication of future results.[/caption]So, the question, at least for now, is not whether there will be big earnings growth – there already is, and we are trending towards "AI Euphoria". The more important question for investors now is whether all these positive fundamentals and future earnings have already been fully priced into the return.We approach investment questions like these using a framework we call 'Intrinsic Value'. Looking at the AI trade through this lens, we see five themes, each with very different earnings trajectories and current valuations. Sorting through it all, we see opportunities in a number of segments – hyperscalers, some semiconductors, and industrial components all seem to have enough upside if the earnings materialize as we expect. However, AI model providers and some of the recent high-profile stock offerings in AI-related names have prices that far exceed realistic growth scenarios, in our view. This week we are diving deep into our Intrinsic Value framework to divine what it is telling us about some of the major themes in the market right now.Intrinsic Value: A Framework to Avoid Overpaying for Growth…and to Avoid Value TrapsWe believe that a traditional 'value' discipline – simply looking at relative valuation multiples in isolation- can underestimate the future earnings power demonstrated in an established growth theme like AI. We also know that a pure 'growth' mindset – assuming the current momentum will persist without any regard to valuation - could leave us overpaying for strong earnings that, even if realized, were already reflected in the current prices.Terms and Privacy PolicyEU DSA contactPrivacy & Cookie SettingsMore Info