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Investors Look Beyond AI

Mike Dickson, Ph.D.
Mike Dickson, Ph.D.

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Strong growth prospects help fuel dividend stocks and other market sectors


With once-unstoppable AI and other tech stocks struggling lately, investors have been making moves, but not out of stocks. Instead, they’re finding opportunities in other corners of the equity universe.

Case in point: Shares of U.S. dividend-paying companies (as measured by the Dow Jones Dividend 100 Index) are up 8.4% on average so far this quarter, while the Nasdaq-100 Index is down 4.8%. Dividend stocks are also ahead year to date, up 31.8% versus 15.2% for the Nasdaq-100 (see the chart).

Year-to-Date U.S. Dividend Stocks vs. the Nasdaq-100 Index

Bloomberg, calculations by Horizon, data as of 10/23/2026

Companies in the Dividend 100 Index typically have strong cash flow, profitability, and consistent dividend payments, traits often found in consumer staples, energy, and healthcare. In general, there’s little overlap with the AI theme or the overall Nasdaq-100.

Another sign that market participation is broadening out, with more stocks joining the party: The S&P 500 equal weight index is up 4.1% this quarter, while the market-cap-weighted version of the S&P 500 (which currently is heavily weighted towards tech and AI stocks) is down slightly.

Ultimately, we believe it’s good that market support is spreading into more sectors, especially given our view of the strong underlying economy and growth prospects for many non-AI businesses. Recent market action illustrates the power of diversification and the importance of being positioned to benefit when a sector that’s been largely responsible for the market’s recent gains (in this case, tech) stumbles. Rather than running for the hills amid heightened AI risks, investors are seeing plenty of return potential in other types of stocks. And while next week’s midterm elections have some investors worried that changes in Washington, D.C., could impact the markets, it’s important to remember that stocks tend to stay steady regardless of which party gains control of Congress. We believe It’s better to stick to a goals-based investment plan than to react to election headlines and political hype.

This commentary is written by Horizon’s asset management team. Past performance is not indicative of future results. Nothing contained herein should be construed as an offer to sell or the solicitation of an offer to buy any security. This report does not attempt to examine all the facts and circumstances that may be relevant to any company, industry, or security mentioned herein. We are not soliciting any action based on this document. It is for the general information of clients of Horizon Investments, LLC (“Horizon”). This document does not constitute a personal recommendation or take into account the particular investment objectives, financial situations, or needs of individual clients. Before acting on any analysis, advice, or recommendation in this document, clients should consider whether the security in question is suitable for their particular circumstances and, if necessary, seek professional advice. Investors may realize losses on any investments. Asset allocation cannot eliminate the risk of fluctuating prices and uncertain returns. All investing involves the risk of loss.

The Dow Jones U.S. Dividend 100 Index tracks the performance of 100 high-dividend-yielding U.S. stocks with a record of consistent payments and strong fundamental metrics.The Nasdaq-100 is a stock market index made up of equity securities issued by 100 of the largest non-financial companies listed on the Nasdaq stock exchange. The S&P 500 is a stock market index tracking the stock performance of 500 companies listed on stock exchanges in the United States that are considered to have large market capitalizations. References to indices, or other measures of relative market performance over a specified period of time are provided for informational purposes only. Reference to an index does not imply that any account will achieve returns, volatility or other results similar to that index. The composition of an index may not reflect the manner in which a portfolio is constructed in relation to expected or achieved returns, portfolio guidelines, restrictions, sectors, correlations, concentrations, volatility or tracking error targets, all of which are subject to change. It is not possible to invest directly in an index. Information obtained from third party sources is believed reliable but has not been vetted by the firm or its personnel.

The investments recommended by Horizon are not guaranteed. There can be economic times when all investments are unfavorable and depreciate in value. Clients may lose money. This commentary is based on public information that we consider reliable, but we do not represent that it is accurate or complete, and it should not be relied on as such. The opinions expressed herein are our opinions as of the date of this document. These opinions may not be reflected in all of our strategies. We do not intend to and will not endeavor to update the information discussed in this document. No part of this document may be (i) copied, photocopied, or duplicated in any form by any means or (ii) redistributed without Horizon’s prior written consent. Forward-looking statements cannot be guaranteed. Other disclosure information is available at www.horizoninvestments.com.

Horizon Investments is a registered trademark of Horizon Investments, LLC

©2026 Horizon Investments, LLC.
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