What Market Charts Reveal About AI, ETFs & Tech Stocks in 2026 | Steve Eisman Analysis

The stock market has delivered another remarkable year, with artificial intelligence, semiconductor companies, and power infrastructure driving most of the gains. But beneath the impressive headline numbers lies a very different story.

In a recent episode of The Real Eisman Playbook, Steve Eisman sat down with Todd Sohn, Chief Chartist at Strategas, to examine what market charts reveal about today's investing landscape. Rather than focusing on company fundamentals, they explored market trends through technical analysis, ETF flows, sector rotation, and investor behavior.

The discussion highlighted one major takeaway:

Many investors believe they're diversified—but they're actually heavily concentrated in technology without realizing it.

Let's break down the key insights.

Why Technical Charts Still Matter

Charts often receive criticism from fundamental investors, but according to Todd Sohn, they serve an important purpose.

A price chart summarizes months of market activity into a visual story. Instead of reading hundreds of earnings reports or economic updates, experienced chartists can identify trends, momentum, investor sentiment, and sector leadership simply by studying price action.

Charts help investors answer questions like:

• Which sectors are leading?

• Where is institutional money flowing?

• Which trends are strengthening?

• Which stocks are beginning to weaken?

• Where is momentum fading?

Technical analysis doesn't predict the future with certainty, but it helps investors understand what the market is currently rewarding—or avoiding.

Semiconductors Continue to Control the Market

If one sector defines today's market, it's semiconductors.

Todd Sohn points out that semiconductor stocks have become the backbone of the entire U.S. equity market.

Just a decade ago:

• Semiconductor companies represented roughly 2% of the S&P 500

Today:

• They account for nearly 19% of the index.

That's an extraordinary shift.

Companies supplying AI chips, memory, networking hardware, and computing infrastructure have become essential beneficiaries of the artificial intelligence boom.

Although semiconductor stocks appear technically overbought after an enormous rally, Todd notes that they remain the market's leadership group.

As long as semiconductors remain strong, broader market indexes are likely to stay resilient.

Software Isn't Sharing the Same Success

Unlike semiconductor companies, software stocks have struggled.

After a difficult year, software has experienced a modest rebound, but Todd describes it as nothing more than a "mean reversion rally."

In technical terms:

• Selling pressure has eased.

• Prices have bounced toward major moving averages.

• However, the longer-term trend hasn't convincingly reversed.

Rather than aggressively buying software stocks, Todd suggests that investors who want exposure may consider limited-risk strategies like options instead of outright ownership.

His conclusion is simple:

Software isn't showing the same strength as semiconductors.

Power Infrastructure Has Become the Next AI Investment Theme

Artificial intelligence requires enormous amounts of electricity.

That reality has created an entirely new investment theme around power generation and infrastructure.

Steve Eisman highlighted GE Vernova (GEV) as one of his favorite long-term holdings.

From a technical perspective, Todd agrees.

While the stock recently became overbought, it is now entering a healthy consolidation phase rather than showing signs of structural weakness.

As long as AI data center spending continues expanding, companies involved in power generation, transmission, and grid infrastructure may continue benefiting.

Not All Big Tech Stocks Look Strong

One of the more surprising conclusions from the discussion is that many of the largest technology companies are no longer showing attractive technical patterns.

Todd reviewed several major names.

Amazon

The chart appears neutral.

It isn't particularly strong or weak, making it difficult to form a high-conviction investment view.

Meta

Meta's chart looks considerably weaker.

Several warning signs include:

• Failure to make new highs while the broader market does.

• A flattening or declining 200-day moving average.

• Relative underperformance versus peers.

Todd believes Meta currently resembles a potential short candidate more than a market leader.

Microsoft

Microsoft shows similar technical weakness.

The stock is approaching previous lows while the overall market continues reaching new highs—a classic sign of deteriorating relative strength.

Oracle

Oracle remains technically messy.

Although the worst selling pressure may be behind it, Todd doesn't see it as one of today's strongest opportunities.

Google Stands Out

Among the mega-cap technology companies, Google displays the healthiest technical picture.

Its chart remains closer to the strength seen in semiconductor and power-related stocks than other large software companies.

Understanding Momentum Through RSI

Throughout the discussion, Todd frequently referenced Relative Strength Index (RSI).

RSI measures the speed of a stock's price movement.

Generally:

• High RSI suggests a stock may be overbought.

• Low RSI suggests it may be oversold.

However, Todd stresses that RSI isn't a buy or sell signal by itself.

Instead, it provides context for understanding whether momentum is accelerating or fading.

ETFs Have Completely Changed Investing

One of the most eye-opening parts of the interview focused on Exchange Traded Funds (ETFs).

According to Todd:

• ETFs now represent roughly 30% of all daily U.S. trading volume.

• During volatile markets, ETF trading can reach 40–45% of total market volume.

Perhaps even more remarkable:

Money has steadily left traditional mutual funds while continuing to flow into ETFs.

The shift reflects investors' preference for:

• Lower costs

• Greater transparency

• Better liquidity

• Easier portfolio management

ETFs have evolved from a niche investment product into one of the primary forces driving modern financial markets.

Leveraged ETFs Are Becoming Increasingly Popular

Another growing trend is the explosion of leveraged ETFs.

These funds attempt to deliver:

• 2×

• 3×

the daily return of an underlying stock or index.

For example:

If Nvidia gains 2% in one day, a 2× leveraged ETF aims to return approximately 4%.

Todd warns that these products:

• Reset daily

• Carry higher fees

• Increase market volatility

• Are designed primarily for short-term traders

Leveraged ETF assets have already exceeded $200 billion, and the category continues expanding rapidly.

Investors Think They're Diversified—They're Not

Perhaps the most important lesson from the interview concerns diversification.

Many investors believe owning an S&P 500 index fund provides broad market exposure.

Today's reality is different.

Technology now represents nearly 40% of the S&P 500.

When companies like Amazon, Google, and Meta are included, more than half of many investors' portfolios effectively depend on one sector.

As Todd explains:

Owning an index fund today often means owning far more technology than investors realize.

ETF Flows Reveal Where Money Is Going

Investor behavior confirms this concentration.

Since the market bottom in late March:

• Roughly $27 billion has flowed into technology ETFs.

• Every other sector combined has experienced net outflows.

This illustrates an extraordinary concentration of investor attention.

Money continues chasing:

• Semiconductors

• AI infrastructure

• Hardware

• Power generation

Meanwhile, many traditional sectors remain largely ignored.

Quality ETFs May Not Offer True Diversification

Many investors purchase "quality" ETFs believing they'll reduce portfolio risk.

Todd argues the opposite.

Many quality funds heavily own companies like:

• Nvidia

• Microsoft

• Meta

Because these companies generate enormous cash flow, they naturally qualify under quality-screening rules.

As a result, buying a quality ETF may simply increase exposure to the same technology companies investors already own through index funds.

Healthcare Could Become a Contrarian Opportunity

Healthcare has quietly become one of the market's weakest sectors.

Its weighting within the S&P 500 has fallen dramatically over the past decade.

Todd believes this severe underperformance could eventually create a mean-reversion opportunity.

However, investors have been waiting for that turnaround for years, and the sector continues disappointing.

Small Caps Continue to Be Ignored

Small-cap stocks have largely fallen out of favor.

The excitement surrounding trillion-dollar AI companies has drawn capital away from smaller businesses.

Although small-cap ETF flows have improved slightly, investor enthusiasm remains limited compared to technology leaders.

Consumer Staples Have Lost Their Market Importance

Consumer staples were once among the largest sectors in the S&P 500.

Today, they represent only about 4–5% of the index.

Individual technology companies like Nvidia and Microsoft are now larger than the entire consumer staples sector.

That dramatic shift illustrates how concentrated today's market has become.

Gold and Bitcoin Aren't Behaving Normally

Another interesting observation involved alternative assets.

Despite:

• geopolitical tensions,

• inflation concerns,

• and elevated interest rates,

Gold has failed to perform as many investors expected.

Bitcoin has also weakened, with ETF outflows increasing.

Todd notes that when assets fail to respond to traditionally bullish conditions, investors should pay attention.

Sometimes what doesn't happen becomes just as important as what does.

The Biggest Risk Facing Investors Today

Steve Eisman closed the discussion with a warning.

Technology has become so dominant that many investors unknowingly hold concentrated positions across multiple funds.

An investor might own:

• an S&P 500 ETF,

• a growth ETF,

• a quality ETF,

• and a technology ETF,

believing they're diversified.

In reality, all four may own many of the same companies.

If technology leadership eventually weakens, there may be very few places to hide.

Final Thoughts

Steve Eisman and Todd Sohn's conversation wasn't about predicting an imminent market crash. Instead, it focused on understanding where today's risks are quietly building.

The charts tell a clear story:

• Semiconductors remain the strongest area of the market.

• Power infrastructure continues benefiting from AI investment.

• Software and several mega-cap technology companies are losing momentum.

• ETF flows reveal unprecedented concentration in technology.

• Many investors are far less diversified than they believe.

As markets continue evolving, understanding sector leadership, technical trends, and capital flows may become just as important as analyzing company earnings.

The biggest lesson is simple:

In today's market, owning an index fund doesn't automatically mean you're diversified. Knowing what's inside your portfolio matters more than ever.

Until next time, this is Steve Eisman, and this has been The Real Eyes Playbook. .
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This post is for informational purposes only and does not constitute investment advice. Please consult a licensed financial adviser before making investment decisions.