The following is an excerpt from Zacks Chief Strategist John Blank’s full Sep Market Strategy report To access the full PDF, click here.

I. Here are important data points and interesting info — on top performing 2026 ETFs — with a ‘tech’ twist.

These are (or were) the stocks driving U.S. and global markets, this year. I mean Semiconductors, Artificial Intelligence, ESG, & Lithium and Battery Tech.

Image Source: Zacks Investment Research

Next, here are the Price/Book valuation charts, for these top performing tech ETFs. 

Semis and AI ETFs are on the top row. They show high Price/Book ratios. 

ESG and Lithium battery tech ETFs are on the bottom row. They show much lower Price/Book ratios.
 

Image Source: Zacks Investment Research

The valuation divergence shown in the charts (shown above) stems from fundamental differences in asset intensity, growth expectations, and market sentiment across these very different ‘tech’ sectors.

For High Price/Book Values in Semis & AI ETFs

1. Capital-Light Intellectual Property (IP) & High Return on Equity (ROE)

Leading AI chip designers and software enablers carry substantial asset-light intellectual property. High net profit margins on low balance-sheet book value naturally compound into elevated P/B multiples.

2. Massive Growth Expectations

Markets price these ETFs on aggressive future cash flow projections and market share expansion, bidding stock prices far above current physical net asset values.

3. Monopoly Pricing Power

Strategic bottlenecks in high-bandwidth memory, advanced node fabrication, and AI infrastructure allow top holdings to command premium operating margins.

For Lower Price/Book values in ESG & Lithium ETFs

1. Asset-Heavy Operations

Mining, refining, and clean energy manufacturing require immense physical capital investments (equipment, land, manufacturing plants). Large physical asset bases denominator-expand book value, keeping P/B ratios low.

2. Commodity Cycle Headwinds

Lithium suppliers and clean-tech manufacturers face pricing pressures due to global supply overcapacity, cyclical demand softness, and compressed profit margins.

3. Capital Outflows & Shifted Sentiment

Broad ESG funds have experienced persistent capital redemptions and re-ratings relative to high-momentum tech sectors, reducing price multiples across the underlying equities.
 

II. Zacks SEPT Sector/Industry/Company Telescope

August 31st, 2026 data show Info Tech remains dominant – at Very Attractive. Misc. Tech, Semis, and Electronics led, once again.

Communication Services rose to Very Attractive from Attractive. This is an “AI” group. 

Financials stayed Attractive. Investment Banking led, again, with stock markets hot.

Industrials rose back to Attractive from Market Weight. Machinery of all types led. 

Energy rose back to Attractive; Oil-Misc. led. Health Care also rose back to Attractive. Medical Care led.

Consumer Discretionary climbed back to Market Weight from Unattractive. Materials rose a notch to Unattractive.

Utilities stayed at a Very Unattractive rating. Consumer Staples stayed Very Unattractive.

(1) Info Tech stayed Very Attractive. Misc. Tech, Semis, and Electronics led, again.

Zacks #1 Rank (STRONG BUY): Teradyne (TER Quick QuoteTER - Free Report)

(2) Communications Services rose to Very Attractive from Attractive. Telco Service and Telco Equipment were both strong. An “AI” group.

Zacks #1 Rank (STRONG BUY): Lumentum Holding (LITE Quick QuoteLITE - Free Report)

(3) Financials stayed Attractive. Investment Banking looked best, again.

Zacks #1 Rank (STRONG BUY): Morgan Stanley (MS Quick QuoteMS - Free Report)

(4) Industrials rose to Attractive from Market Weight. Machinery and Machinery-Electrical looked best.

(5) Energy rose to Attractive from Market Weight. Oil-Misc. and Energy-Alternates led.

(6) Health Care rose to Attractive from Market Weight. Medical Care looked best.

(7) Consumer Discretionary rose to Market Weight from Unattractive. Consumer Electronics and Non-food Retail/Wholesale looked best.

(8) Materials rose to Unattractive from Very Unattractive. Building Products were best.

(9) Consumer Staples rose to Unattractive from Very Unattractive. Solely, agri-business looked best.

(10) Utilities stayed Very Unattractive. Utility-Electric Power and Utility-Gas Distr. Best.
 

III. Conclusion

Is the chip and “AI” tech stock momentum rally over for 2026?

We shall see!

This month’s Zacks Sector and Industry Rank table shares with us that the earnings estimates are still going up in the booming Info Tech space.

But it is not clear whether this “good news” has all been priced in, or not.

Enjoy the rest of my Zacks SEPT market strategy report.

Warm regards,

John Blank
Zacks Chief Equity Strategist and Economist