5 Stocks to Consider as Investors Rotate Out of Tech

As mega-cap tech names and AI-related stocks face pressure from valuation concerns, questions about capital expenditure returns, and shifting political headwinds regarding data-center buildouts, capital is rotating toward companies with resilient earnings, strong balance sheets, and clear long‑term demand drivers.

PepsiCo (NASDAQ:PEP), Charles Schwab (NYSE:SCHW), Regeneron Pharmaceuticals (NASDAQ:REGN), Cigna (NYSE:CI), and Boston Scientific (NYSE:BSX) all fit that mold. Each sits outside of “pure tech,” yet offers attractive growth, defensiveness, or both in the current environment.

1. PepsioCo

PepsiCo, a leading beverage and snacks company with a diversified portfolio of products including Pepsi, Gatorade, Lay’s, and Doritos, is well-positioned in the consumer staples sector, which has emerged as a rotation winner amid the shift to value stocks.

PEP is currently trading at $142.71, with a fair value of $163.27 and +14.7% upside, as per the InvestingPro models.

Source: InvestingPro

Amid worries about speculative growth unprofitable tech stocks, investors are rediscovering the value of predictable cash flows, healthy dividends, and steady buybacks. Pepsi trades at a forward P/E of 18.1x, while the dividend yield has climbed above 4%. It has raised its payout for more than 50 consecutive years.

PEP’s defensive characteristics make it a useful portfolio anchor when investors are reducing exposure to AI-related chip stocks and speculative tech shares.

2. Charles Schwab

Charles Schwab operates in brokerage, wealth management, banking, and asset management. Its business can benefit from rising investor participation, strong equity-market activity, growth in client assets, and long-term demand for low-cost investment products.

SCHW ended Thursday’s session at $92.58, versus a fair value estimate of $112.06 and +21% implied upside. Furthermore, analysts are more optimistic than the valuation model. The $116.86 average target across 22 analysts implies +26.2% upside.

Source: InvestingPro

It has a 7.1% free cash flow yield and a forward P/E of 15.8x. Recent quarters have shown solid revenue and EPS growth, including double-digit increases year-over-year in key metrics.

As investors rebalance portfolios and move toward value-oriented sectors, SCHW could benefit from greater trading activity, new-account growth, and increased demand for advisory and cash-management services.

3. Regeneron Pharmaceuticals

Regeneron offers non-AI growth through its immunology and other franchises, most notably Dupixent, which continues to expand across indications and geographies. The company also maintains a deep pipeline and a net-cash position that provides flexibility.

The stock currently trades at $902.90, with a fair value upside of +28% according to InvestingPro. REGN carries a "Great" health label with a score of 3.19, and a forward P/E of 20.1x, reasonable for a company with a track record of commercial execution and high margins.

Source: InvestingPro

Third-quarter 2026 results showed robust revenue growth and strong profitability. Drug demand is largely insensitive to macro swings, and successful biologics can generate high‑margin, recurring revenue for years.

As investors re‑assess richly valued software and semiconductor names, a profitable, innovation‑driven company like REGN, with clear catalysts from pipeline readouts and label expansions, offers a different kind of growth at a more reasonable valuation than many tech peers.

4. Cigna

Cigna operates in health insurance and pharmacy benefit management, two areas with structural demand tied to demographics and chronic-care trends rather than discretionary tech spending.

CIG is currently priced at $301.48, with a fair value estimate of $460.32, marking a jaw-dropping +52.7% upside. Its financial health label is "Great," with a score of 3.29, the highest of the five stocks mentioned here.

Source: InvestingPro

The company delivered a strong third-quarter 2026, with revenue and adjusted EPS beating expectations and management raising full-year profit guidance. It trades at a forward P/E of 12.5x, a clear discount to many healthcare peers, while carrying a low beta.

For investors leaving the frothy valuations of the tech sector, Cigna offers a compelling value proposition, a low-volatility profile, and aggressive share buyback programs that reward patient shareholders.

5. Boston Scientific

Boston Scientific rounds out the list as a medtech name with both defensive and growth attributes. The company develops medical devices across cardiology, electrophysiology, endoscopy, urology, and neuromodulation, addressing large and growing patient populations.

Its fair value of $58.51 implies +31.1% upside, and its health label is "Good" with a score of 2.91. It trades at 18.7x forward earnings with a 6% free cash flow yield, a combination more typical of a mature company than a medical device grower.

Source: InvestingPro

BSX has demonstrated steady margin improvement and disciplined capital deployment in recent quarters, helping it compound earnings and free cash flow. The aging global population is a massive, unstoppable secular tailwind that has nothing to do with microchips or cloud computing.

As investors look for non‑tech growth stories backed by real demand and demographic tailwinds, Boston Scientific offers a compelling alternative to more volatile sectors.

Bottom Line

The tech sector has delivered incredible returns, but no sector goes up in a straight line forever. By rotating capital into high-quality, non-tech names like PEP, SCHW, REGN, CI, and BSX, investors can position their portfolios for stability, value, and resilient growth in the next phase of the market cycle.

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This content is for informational purposes only and not investment advice. Always conduct your own research.

At the time of writing, I am long on the Dow Jones Industrial Average, the S&P 500, and the Nasdaq 100 via the SPDR Dow ETF (DIA), the SPDR S&P 500 ETF (SPY), and the Invesco QQQ Trust ETF (QQQ). Additionally, I have a long position on the Energy Select Sector SPDR ETF (XLE) and the Health Care Select Sector SPDR ETF (XLV).

I regularly rebalance my portfolio of individual stocks and ETFs based on ongoing risk assessment of both the macroeconomic environment and companies’ financials.

The views discussed in this article are solely the opinion of the author and should not be taken as investment advice.

Follow Jesse Cohen on X/Twitter @JesseCohenInv for more stock market analysis and insight.