By Nick Brown, Tech and Politics Correspondent, Stock Trader Network
The value trade looks strong in 2026, according to Todd Gordon, founder of Inside Edge Capital.
Gordon, appearing on PreMarket Prep Tuesday, says the line between value and growth is breaking down because some of the fastest growing companies in the world now screen as value.
That move is turning broad value ETFs into stealth AI trades.
Micron (MU) is the clearest example. The company is on track for explosive earnings, and revenue for the upcoming quarter is expected to reach about $35 billion. That compares with $9 billion in the same period last year.
Adjusted earnings are projected to rise more than 900%. GAAP earnings are expected to rise more than 1000%. Forward earnings estimates move from about $8 in fiscal 2025 to about $61 in fiscal 2026 and about $121 in fiscal 2027.
Gordon said the recent selloff in Micron had nothing to do with the company, pointing to pressure coming out of South Korea and a broader pullback in emerging markets. He also said Micron still qualifies as a value stock because the stock price cannot keep up with the earnings curve. That creates a strange setup, as Micron is one of the fastest growing companies in the market.
Yet it sits inside the largest value ETF because its forward multiple looks cheap.
This is where the distortion begins. Value ETFs are not being led by banks or industrials or consumer staples—they are being led by memory names tied directly to the AI infrastructure buildout. Micron is the largest weight in VTV. Samsung and SK Hynix are major forces in emerging markets funds. These companies are not slow moving value names, they are central players in the AI supply chain. Their earnings are rising so fast that they overpower the rest of the value complex.
Gordon compared the situation to the GameStop (GME) effect inside XRT a few years ago. One stock became so large that it skewed the entire ETF until the next rebalance. He said the same thing is happening now. The factor model is being pulled around by companies that do not behave like traditional value stocks. He even floated the idea of a true value ETF that would screen for low volatility and stable earnings rather than low multiples created by explosive growth. He pointed to Berkshire Hathaway (BRK.B) as the type of company that fits the old definition of value. It moves slowly, tt does not swing around,and it does not post triple digit earnings growth.
The emerging markets story fits the same theme. EEM hit an all time high the day before the recent selloff. South Korea is up more than 100% this year. Taiwan is up more than 70%. Gordon said this is not a China story, it is a semiconductor story. Information technology and memory names are driving the move.
He added the DRAM ETF to his portfolio in June. It holds Samsung, SK Hynix and Micron. It is up about 35% to 40% since he entered the trade. EEM is also breaking a 20 year relative high against the S&P. That signals a possible multi year cycle of outperformance.
Gordon also walked through the macro backdrop.
Markets are pricing a high chance of a rate hike in September. He watches the spread between the 2 year yield and the Fed funds rate. It sits around 45bps. He said it would need to reach 1% or more before he calls a true hawkish turn. The Dollar Index is pressing resistance. A breakout would act like a rate hike on its own. The 10 Year Yield is sitting near a zone that could determine the next move for rates.
Gordon said it is hard to call a top when companies are putting up this kind of growth. The value trade looks strong. The truth is more complicated.
AI memory stocks are reshaping the factor model. Investors who think they are buying classic value may be getting a stealth AI allocation instead.
