2025 marked one of the narrowest markets in history.

2025 marked one of the narrowest markets in history. The Russell 2000 saw 65% of its returns concentrated in AI infrastructure plays, while quality businesses traded at historically cheap multiples. This extreme bifurcation between winners and losers has created unprecedented valuation disparities. Unprofitable companies surged while profitable businesses lagged significantly. The market remains heavily concentrated on a singular theme tied to data center capital expenditure from a handful of companies. Such extreme concentration presents both substantial opportunities and risks for investors. In this environment, actively managed portfolios focused on earnings-driven fundamentals may provide meaningful value compared to passive index exposure.