Managing Editor’s Note: Last night, Jeff Brown and Jason Bodner sat down to discuss what may be the most explosive asset class of 2026… a unique group of “hidden” stocks flying under the radar that they believe could become the next AI mega-winners. If you missed out, then you can catch the replay of the event right here. Jeff and Jason each gave away a top pick that they say you need to buy before March… A Bull Market Hiding in Plain Sight? By Larry Benedict, editor, Trading With Larry Benedict Excitement about artificial intelligence (AI) sparked this bull market. It could also be its undoing. This bull market started in late 2022 alongside the introduction of ChatGPT. Since then, the S&P 500 has jumped 94%, while the Nasdaq is up 126%. Large-cap growth stocks leveraged to the AI trade have done the heavy lifting. But now AI tools are becoming so advanced that they’re threatening tech companies whose software and functions can be replaced by AI. That’s taking a toll on growth stocks across sectors like software and cybersecurity. And tech stocks’ dip is weighing on indexes like the S&P 500, which has gone nowhere for months. In fact, the S&P is trading at the same level as at the end of October. But the S&P’s slump is masking a major development taking place under the hood… and handing us a big opportunity for profits. S&P 500 Weighed Down? One by one, new AI productivity tools are taking down tech bellwethers. IBM saw its stock drop by 13% in a single session following the update of an AI coding tool that threatens the company’s consulting services. It was IBM’s largest single-day drop in over 25 years. Another AI tool acting as a “virtual assistant” wiped out $285 billion in market value from software companies offering a similar product suite. The technology sector is the third-worst-performing sector in the S&P 500 this year. The communication services sector, which includes companies like Meta Platforms and Google-parent Alphabet, is performing only slightly better. These were among the top performers last year. Since these two sectors make up nearly 45% of the S&P 500, they’re dragging down the index, which has struggled around the same level since October. But that’s masking a bull market taking place… in the “average” stock. While the Magnificent 7 gets a lot of headlines, we should remember that there are 493 other stocks in the S&P 500. Year-to-date, over 300 stocks of those stocks are outperforming the index as a whole. That’s the highest share of outperformers ever seen in data going back 40 years. And it could just be the start, as a number of tailwinds line up to boost the average stock… Tune in to Trading With Larry Live 
Each week, Market Wizard Larry Benedict goes live to share his thoughts on what’s impacting the markets. Whether you’re a novice or expert trader, you won’t want to miss Larry’s insights and analysis. Even better, it’s free to watch. Simply visit us on YouTube at 8:30 a.m. ET, Monday through Thursday, to catch the latest. | The Hidden Bull Market The S&P 500 is a capitalization-weighted index, which means that stocks with a larger market value receive a greater allocation in the index. The 10 largest stocks currently make up 41% of the index and include familiar tech stocks now taking a hit. While that’s holding back the index, the average stock is having a historic bullish moment. At one point in February, an equal-weight version of the S&P 500 that allocates evenly across all index members is outperforming the traditional index by the most in over 30 years. And valuations are tipped in favor of the average stock. While the top 10 largest S&P stocks trade at a forward P/E of 27.1, the remaining companies trade at a P/E of 19.5. Earnings growth is accelerating in the average stock as well. From 2023 to 2025, the Magnificent 7 dominated earnings growth in the S&P 500. But over the next two years, earnings growth in the equal-weight S&P 500 is expected to outpace growth in the Mag 7. Cheaper valuations and faster earnings growth make a powerful combination that could favor stocks outside of the familiar AI leaders of the past several years. That’s why I recently shared how to use these shifting dynamics in the S&P 500 to profit. There’s a lot going on that could cause chaos this year, from Trump’s insistence on tariffs to a new Federal Reserve chair coming in the next few months. But one ticker could help you position yourself to take advantage of the money flows… and I want you to be ready to profit. You can watch my recent briefing for the full picture. Happy Trading, Larry Benedict
Editor, Trading With Larry Benedict Free Trading Resources Have you checked out Larry’s free trading resources on his website? It contains a full trading glossary to help kickstart your trading career – at zero cost to you. Just click here to check it out. | | 
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