Warm greetings from the Dougherty Investment Advisors team. As we are seeing attention grabbing headlines and recent volatility, particularly in AI technology stocks, conversations are being sparked about the future of software and social media.
The AI Paradox
Few themes have captured the market’s imagination like artificial intelligence. On one hand, AI is being described as so transformative that it could disrupt entire industries, including traditional software businesses. On the other hand, many of the very companies leading this innovation, such as Microsoft and other large technology firms, have seen their stock prices decline.
Why the disconnect?
Investors are grappling with two competing narratives at the same time. Some fear that AI could eventually reduce the need for conventional software models. Others are reacting to the substantial spending required today to develop and deploy AI at scale. Large investments in data centers, computing power, and talent can pressure how much can be made in the short-term, even when long-term estimates remain positive.
Resetting Expectations
Technology stocks entered 2026 with high expectations already priced in, already having many of the leading companies named “The Magnificent 7”. A question many have is with AI doing so much for us, will software platforms such as Microsoft Office be needed as much in the future? We believe they will be. Jensen Huang, the CEO of NVIDIA, in a recent interview said AI will rely on existing software, rather than basic tools developed from scratch.
The products that companies such as Google, Microsoft, and Apple provide have grown stronger and more useful through AI. They have shown no signs of diminishing and continue to be the innovative leaders of the market. Many excellent businesses, including our firm, will continue to utilize the AI powered products of these companies to better perform our work and daily tasks.
Recent pullbacks reflect profit taking and attempted market timing rather than a rejection of innovation itself. History reminds us that transformative technologies often experience periods of volatility as markets recalibrate how and when future benefits will materialize.
Why This Matters During Tax Season
Volatile markets can create planning opportunities. As portfolios shift, tax-aware strategies such as rebalancing and loss harvesting can help improve long-term, after-tax outcomes. This is one of the reasons we believe investment management and tax planning should work hand in hand, especially in changing market environments.
Our Approach
At Dougherty Investment Advisors, we remain focused on quality, patience, and disciplined decision-making. Your portfolio is designed not for headlines, but for long-term goals, incorporating growth opportunities while managing risk thoughtfully.
Thank you for the trust you place in our firm. We hope you have all managed to stay warm during the cold winter storms this season.
P.S. If we have assisted you or your family and you have not already done so, we would greatly appreciate your leaving a review at https://tinyurl.com/DoughertyInvestments.
Wishing you continued confidence and progress,
The Dougherty Team
A Tradition of Excellence
4048 Deltona Blvd | Spring Hill, FL 34606
