Investors are navigating one of the most complicated times in recent market history as long-held beliefs about how value is determined and evaluated are called into question by the growth and impact of technology and artificial intelligence (AI) in particular.
InvestmentMarkets CEO Darren Connolly says the current environment requires investors to think deeply and critically about where long-term value is genuinely being built. He notes the need to consider how structural shifts may alter the outlook for individual businesses and entire industries.
“There is a clear need for investors to continue to interrogate the assumptions that sit beneath valuations,” Connolly said. “Periods of rapid change and disruption tend to create both mispriced pessimism and mispriced optimism, and being able to distinguish between the two is important.”
These themes are echoed by Simon Raubenheimer from Contrarius Investment Management, who emphasised that many companies facing technological change display signals that valuation screens rarely capture. “Some of the best opportunities sit where the market feels least comfortable,” Raubenheimer said. “Misunderstood transitions, business model shifts and industries assumed to be in decline can all look very different when you assess them from a different perspective.”
A good example is The New York Times. For years, the company screened poorly on every traditional valuation metric as revenues in its legacy print business halved between 2006 and 2011, leading value, growth and quality investors to write the stock off. Raubenheimer said deeper analysis revealed a small but fast-emerging digital subscription business with far superior economics and a global addressable market - something no quantitative screen captured at the time. “It was tiny, buried inside the numbers, but transformative,” he said. “Once the market recognised what was happening, the share price recovered dramatically.”
AI is playing a growing role in shaping how investors assess long-term opportunities.Raubenheimer believes that while the conversation often centres on whether AI is in a bubble, the more important question may be whether investors are underestimating how far-reaching the technology will be. “We think this is one of the most profound shifts in decades. Many of the companies that will benefit are trading at valuations that don’t fully reflect the scale of what’s unfolding.”
At the same time, he cautions that disruption is not uniformly positive. Companies that appear superficially inexpensive may still be exposed to long-term value erosion. “Historical earnings strength doesn’t guarantee future durability,” he said. “Understanding which businesses are genuinely resilient - and which are vulnerable - requires deeper analysis than price multiples alone.”
Volatility has become a defining feature of current market conditions, often creating confusion about what constitutes genuine risk. Raubenheimer notes that investors frequently interpret volatility as a sign of weakening fundamentals, when in many cases it’s a natural feature of periods marked by innovation and transition. “A sharp drop in sentiment doesn’t always alter a company’s long-term value,” he said. “It can simply bring the price back to a level where it becomes attractive again.”
Reflecting on the past decade, Raubenheimer says one of the most important lessons for investors is to resist the instinct to be pessimistic - particularly when headlines skew negative. “Pessimism is intellectually seductive but financially unhelpful,” he said. “The best investors tend to be those who remain optimistic about long-term progress, even when the short-term noise is overwhelming.”
“Today’s environment really demands a clear eyed view - understanding what is changing, what is not, and where long-term value is actually being created,” Connolly added. “That’s the conversation investors need to be having with themselves as we move into 2026.”
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