Albert Szent-Györgyi’s observation about discovery applies perfectly to active investment management in 2026. While growth stocks have dominated markets for fifteen years, value investing has quietly delivered exceptional returns across multiple markets, yet few investors have paid attention.
Value investing focuses on companies trading below their intrinsic worth, typically exhibiting lower price-to-earnings ratios, lower price-to-book valuations, and often paying dividends. Growth investing targets companies expected to deliver above-average earnings expansion, often commanding premium valuations justified by anticipated future performance.
In 2025, the S&P 500 Growth index rose 22.2% whilst the Value index gained 13.2%, yet this headline obscures a more nuanced reality. European value stocks benefited from rotation away from US growth stocks, with the JPMorgan Europe Strategic Value Fund gaining 20.21% and the Dimensional European Value fund rising 17.39%, demonstrating that selectivity within value strategies delivered returns rivalling or exceeding broader growth indices.
By the end of 2025, the 10 largest companies accounted for nearly 41 percent of the S&P 500’s total weight, more than doubling from the 18-23% range that prevailed between 1990 and 2015. This extraordinary concentration, driven largely by megacap technology and AI-related stocks, means passive investors inadvertently make enormous bets on a handful of companies whose valuations embed extraordinarily optimistic assumptions.
Yet compelling value exists in technology companies trading at reasonable multiples. Western Digital soared 238% last year, whilst Micron Technology’s forward P/E ratio of around 10 remains significantly lower than the S&P 500 average of approximately 23. This disconnect illustrates opportunities active managers identify through fundamental analysis rather than momentum chasing. Not all AI beneficiaries command stratospheric valuations.
The artificial intelligence revolution demands vast amounts of power, creating opportunities in sectors overlooked by investors fixated on semiconductor manufacturers. Global electricity consumption for data centres is projected to double to approximately 945 TWh by 2030, consuming as much electricity as Japan does today. US data centre electricity demand is projected to grow 133% to 426 TWh by 2030, with Goldman Sachs Research estimating a potential 10-15% boost to Europe’s power demand over the coming decade from data centres.
Clean energy companies, utilities with renewable portfolios, and infrastructure operators represent value plays on the AI theme that trade at fractions of the multiples commanded by software companies, yet their growth prospects directly correlate with AI adoption.
Healthcare innovation presents another area where active management uncovers value that passive strategies miss. The NASDAQ Biotechnology Index gained approximately 34 percent in 2025, demonstrating strong appreciation without bubble dynamics. Biotechnology Series A valuations averaged approximately $79.4 million in 2025, reflecting realistic assessments rather than speculative enthusiasm.
The sector’s innovation pipeline spans robotic surgery, organ replacement technologies, AI-enabled diagnostics, and CRISPR-based gene editing. The global biotechnology market is expected to reach $5.85 trillion by 2034, with a CAGR of 13.6%. This growth trajectory occurs alongside reasonable valuations which is a combination rarely found in sectors experiencing genuine innovation.
The patterns that emerged in 2025 demonstrate why active management remains essential. Identifying that companies like Micron offer technology exposure at value multiples demands fundamental analysis. Understanding that AI infrastructure creates opportunities in energy and utilities requires thinking beyond conventional sector classifications.
Active managers possess the flexibility to construct portfolios that capture these opportunities regardless of benchmark categorisations. They can identify which biotechnology companies possess genuine commercial pathways and distinguish between energy companies positioned to benefit from electrification versus those facing structural decline.
The concentration in passive indices means index investors inadvertently make enormous bets on extraordinarily expensive stocks. Active managers can participate in genuine growth themes through companies trading at reasonable multiples, providing both upside participation and downside protection.
The discovery Szent-Györgyi described requires examining the same information available to all investors but reaching conclusions others miss. Value opportunities exist across markets. Technology exposure doesn’t require purchasing the most expensive stocks. Biotechnology innovation proceeds without bubble valuations. AI infrastructure creates opportunities far beyond semiconductor manufacturers.
In an environment where headline indices become increasingly concentrated in extraordinarily expensive stocks, the distinction between active and passive approaches has never mattered more. The investors who prosper will be those who recognise that participation in genuine growth themes doesn’t require paying growth stock premiums, and that looking beyond the obvious reveals possibilities others overlook. This is the essence of active management and why it remains indispensable for investors seeking to see what everyone has seen yet think what nobody has thought.
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