One of the the biggest stock-market stories of 2026 so far has been investors’ growing affinity for value stocks.

Since the start of the year, value-stock stalwarts like Walmart, Costco, Coca-Cola, Proctor & Gamble and Johnson & Johnson have outperformed Big Tech names like Amazon, Nvidia, Microsoft, Alphabet and Meta.

Over the past few months, this has become one of the most visible hallmarks of a rotation trade that has favored stocks in left-behind sectors and size categories.

After years of trailing their larger peers, small-cap stocks have charged ahead since the calendar turned, seemingly at the expense of hot technology names that had previously powered much of the S&P 500’s gains since the beginning of the current bull market.

But the shift in leadership has inspired pushback from some investors who think the old framing of what constitutes good value in the equity market could use an update.

For much of the past century, investors have largely defined value stocks based on one critical criteria: price-to-book ratio. This ratio compares a company’s market price with the net value of the assets and liabilities on its balance sheet.

A price-to-book ratio below 1 was considered ideal. If a company had a price-to-book ratio of 0.8, that meant investors were essentially buying $1 worth of assets for 80 cents.

To investing pioneers like Benjamin Graham, the professor who taught Warren Buffett and authored seminal texts like “The Intelligent Investor,” an attractive price-to-book ratio likely meant any investor who was buying the stock was getting a good deal, giving them an ample margin of safety in case the underlying business struggled.

But economic changes over the past few decades have inspired some to look for a different approach to answering the value question.

Michael Lebowitz, a portfolio manager at RIA Advisors, told MarketWatch that the price-to-book ratio can be a weak metric for determining value stocks. This may be particularly true for high-growth technology companies. He cited a couple of shortcomings.

First, the price-to-book ratio isn’t forward-looking. That means it doesn’t incorporate Wall Street analysts’ profitability forecasts, unlike the forward price-to-earnings ratio or the price/earnings-to-growth, or PEG, ratio, which compares a stock’s price against how quickly Wall Street analysts expect the company’s earnings to grow over the coming years.

Second, many of the information technology stocks that dominate the U.S. equity market are considered asset-light — although massive investment in artificial-intelligence infrastructure has begun to alter this perception. Still, being asset-light means the balance sheets of many tech companies are stocked with intangible assets, including patents and licenses, rather than capital assets, such as factories or specialized equipment. U.S. accounting rules for intangible assets have been subject to criticism for potentially understating their true value or sometimes excluding some internally developed assets entirely.

Both of these factors make it harder to compare the stocks of two different companies using a price-to-book ratio. Lebowitz recommends that investors instead focus on the growth potential of earnings, or the PEG ratio. He argues that it works better because it compares the price of a stock with how quickly profits are expected to grow — a feature more central to the modern-day investor’s mission.

Specifically, Nvidia’s price-to-book ratio recently was 29, while Amazon’s was 6, according to FactSet data. The same metric for Walmart and Costco was 9.5 and 14.3, respectively. That implies Walmart and Costco look much more attractive than Nvidia, but less attractive than Amazon.

But adding in the growth component for earnings by relying on the PEG ratio paints a different picture. Nvidia’s earnings are expected to grow rapidly, putting its PEG ratio at 0.78. That implies it would be a bargain for investors who put profits first, with a similar view emerging for Amazon, with its PEG ratio of 1.9, versus Walmart at 5.76 and Costco at 5.2.

“If you do any kind of realistic forward-looking valuation analysis, you quickly find that Walmart is anything but a value stock, and Nvidia is a value stock — and could even be considered a deep-discount value stock,” Lebowitz told MarketWatch.

Big Tech names have been struggling since late October, when the tech-heavy Nasdaq composite tallied its most recent record finish. Yet the PEG ratio may help explain why Big Tech names represent an attractive investment opportunity from here: Microsoft has a PEG ratio of 2.4, less than half that of Walmart.

“I’m a value guy, and for the first time in four years I’m buying Microsoft,” Chris Grisanti, chief market strategist and a portfolio manager at MAI Capital Management, told MarketWatch. “I am genetically opposed to buying stocks like Nvidia, which are such market darlings, but I can’t look at that math and turn away from it. It’s just too compelling. For the first time ever, we’ve bought Nvidia in our value portfolio.”

To be sure, the rapid adoption of AI, and the massive spending that has accompanied the rise of this technology, has complicated the outlook for many individual companies. Just because firms like Nvidia and Microsoft have dominated their respective industries in the past doesn’t mean they will continue to do so in the future.

Yet the PEG ratio isn’t the only metric signaling that tech stocks are looking attractive for value-conscious investors. A breakdown of forward price-to-earnings ratios for the 11 S&P 500 sectors shows technology stocks no longer command the premium that they once did. In fact, industrials, consumer staples and consumer discretionary stocks all currently have higher valuations based on the P/E ratio, which is considered the gold standard of Wall Street valuation metrics.

“The tech sector is actually cheaper than consumer staples right now, which is pretty unusual,” said Jay Hatfield, portfolio manager at Infrastructure Capital.

Even CNBC’s Jim Cramer posted on X on Tuesday that Nvidia was becoming a value stock.

U.S. stocks closed lower Wednesday, a day after the major U.S. indexes shrugged off rising oil prices. The S&P 500, Nasdaq composite and Dow Jones Industrial Average were all lower on the year to date.