Core Insights - The article discusses the shift in investor focus towards companies with sustainable earnings power, indicating that future market returns will be driven by fundamentals rather than hype [1][2] Group 1: Market Trends - Investors are increasingly looking for a broader market rally beyond technology stocks, with industrials, healthcare, and small-cap companies expected to lead [2][3] - There is a growing caution among investors regarding high tech valuations, allowing other sectors to gain traction [3] Group 2: Stock Selection Methodology - Stocks considered for analysis have market capitalizations exceeding $2 billion, with a focus on those forecasted to have EPS growth over the next 5 years and a return on equity above 20% [5] - The stocks are ranked based on the number of hedge fund holdings, utilizing Insider Monkey's database as of Q3 2025 [5][6] Group 3: Company Highlights - ServiceNow, Inc. (NYSE:NOW) has a return on equity of 16.81% and is projected to have an upside potential of 68% with a price target of $200 [8] - Micron Technology, Inc. (NASDAQ:MU) has a return on equity of 22.55%, with a price target raised to $385 from $330, indicating strong demand for generative AI and a potential upcycle extending into 2027 [12][13][14]

Core Insights - The "Magnificent Seven" companies continue to dominate market performance, but recent turbulence raises questions about their ability to deliver [1] - T. Rowe Price's analysis suggests that market leadership may broaden beyond these tech giants, indicating potential opportunities for active investing strategies [2][3] Market Leadership - The spread of earnings growth between the Tech+ and extech sectors of the S&P 500 Index is at its narrowest since Q1 2023, suggesting a potential shift in market dynamics [3] - Active investing strategies could allow investors to capitalize on companies positioned for growth across various sectors, not just technology [3] Investment Strategies - The T. Rowe Price U.S. Equity Research ETF (TSPA) exemplifies an active ETF that utilizes fundamental research to guide investment decisions, charging a competitive fee of 34 basis points [4] - Active ETFs may provide a viable option for investors looking to prepare for a broader set of market opportunities [4]