For much of the past decade, growth stocks powered the market higher. In 2026, that pattern has reversed. As of the close on Sept. 4, the Vanguard Morningstar Value ETF (VTV) had returned 19.8% year to date, while the Vanguard Morningstar Growth ETF (VUG) was up 9%. Perhaps more surprising, three old-line technology names — Micron (MU), Cisco (CSCO), and Texas Instruments (TXN) — are among the leaders in the value camp.
Micron has climbed more than 250% year to date and is the second-largest holding in VTV. Despite that explosive growth, the stock still qualifies as value, with a forward P/E of less than 5.5.
The company is riding a memory supercycle. A shortage has driven up prices, revenue, and gross margins, and the supply-demand environment for memory is likely to remain imbalanced well into the future. Demand has spiked because of the accelerating AI infrastructure build-out, but new foundries take years to build. Meanwhile, the three major DRAM makers — Micron, SK Hynix, and Samsung — are focusing most of their production on high-bandwidth memory (HBM), which is packaged with AI chips to optimize performance. Manufacturing HBM requires the same tools as advanced logic chips and more than three times the wafer capacity of ordinary DRAM. With those hurdles, memory makers simply cannot keep up with growing demand.
For the first time, Micron has signed long-term supply contracts with its largest customers, locking in price floors and volume commitments for up to five years. That gives its business outlook more stability than in prior cycles. If the memory market becomes less cyclical and more structural, the stock could still look like a bargain at current levels.
Once a darling of the dot-com boom, Cisco is back among the leaders of the value index. It is the eighth-largest holding in VTV and is up more than 40% this year.
Cisco is benefiting from a strong networking cycle, with heavy demand from AI workloads and network traffic. Orders from telecom network customers surged 30% last quarter, with strong demand for routers and optics. Large orders are coming from both hyperscalers and neoclouds, while enterprise orders rose 21%. Its security portfolio is also beginning to benefit from the rise of agentic AI. Security product orders grew by a double-digit percentage last quarter, and recent acquisitions have enhanced its observability and security offerings.
With a forward P/E of 21, Cisco may not remain in the value category for much longer. On a one-year forward basis, its valuation is 19.5, higher than Nvidia at 14.5 and Broadcom at 19, with slower revenue growth.
Texas Instruments is up nearly 50% this year. The company serves a variety of industries, including industrial, electronics, and automotive. The AI infrastructure build-out has also driven growth. In data centers, it provides power management chips and high-voltage hardware, and growing electrical intensity from AI is creating strong demand. Its data center business is expected to double this fiscal year, though it remains a smaller part of its overall business.
In the industrial space, revenue rose 30% last quarter. The company is still benefiting from the end of a previous pandemic-related build-out, as well as growing demand from factory automation and smart grids. At a forward P/E of 30, the stock is not cheap, but the cyclical nature of its business keeps it in the value category.
In 2026, value stocks are outperforming growth, and three technology stalwarts are key drivers. Micron’s cyclical memory business, Cisco’s networking demand, and Texas Instruments’ industrial and AI power exposure are helping support the value camp.
