The Boyar Value Group’s 2nd Quarter Letter 2026

Boyar Value warned that artificial intelligence has created an unusual bubble—one in earnings expectations rather than stock valuations. Memory-chip makers like Micron and SanDisk have surged on the assumption that today's extraordinary profits will persist, but the semiconductor industry has historically cycled between scarcity-driven booms and glut-driven busts. Micron rose 839% over twelve months through June, and the Philadelphia Semiconductor Index more than doubled in the first half of 2026, matching dot-com-era volatility. By contrast, software stocks have been marked down sharply despite stable profits, as investors worry artificial intelligence will cannibalize their business models. The managers argued this represents a market making two opposite bets about whose profits will last—and one side is likely wrong. The broader market showed genuine strength in the second quarter, with the S&P 500 and Nasdaq posting their best quarters since 2020, up 14.9% and 21.4% respectively. Nine of eleven sectors rose, and the Russell 2000 reached an all-time high, up 22% for the first half. Notably, the Magnificent Seven underperformed for the first time in years, with every member except Alphabet trailing the index. The correlation between cap-weighted and equal-weighted versions of the S&P 500 fell to 0.79, the weakest in 25 years, signaling that individual stock selection is mattering again after years of index-driven moves. The managers noted that the market's largest companies now trade at valuations approaching their three-decade average, a sharp reversal from the 40% premium they commanded a year ago. They reiterated their case for Microsoft, which fell further in June despite unchanged business fundamentals, and noted Madison Square Garden Sports rose 20% after the Knicks won their first championship in 53 years but still trades below intrinsic value. The key risk: rising interest rates could derail the small-cap rotation, as smaller companies carry floating-rate debt that rises immediately when rates climb.