Value Has Outperformed Growth in 2026: 3 Surprising Tech Stocks Leading the Way

Growth stocks have helped power the market higher for much of the past decade, but in 2026, value stocks have outperformed. As of the close of trading on Sept. 4, the Vanguard Morningstar Value ETF (NYSEMKT: VTV) had produced a 19.8% return year to date, while the Vanguard Morningstar Growth ETF (NYSEMKT: VUG) was up 9%.

However, some of the stocks helping lead the charge in the value realm may surprise you, because the category includes three tech stalwarts.

Micron

Up more than 250% year to date, Micron (NASDAQ: MU) has certainly played a role in value's outperformance. Those gains have boosted the stock to a position as the Vanguard Morningstar Value ETF's second-largest holding. Micron has been seeing explosive growth, but with a forward P/E of less than 5.5, it's still classified as a value stock.

The company has been riding the updraft of a memory supercycle, benefiting from a shortage that has resulted in surging prices, soaring revenue, and outstanding gross margins. The supply-and-demand environment for memory, meanwhile, is likely to stay imbalanced well into the future.

Demand for memory has spiked rapidly because of the accelerating AI infrastructure build-out, but it takes years to build the new foundries to increase supply. Meanwhile, the big three DRAM (dynamic random-access memory) makers -- Micron, and South Korean giants SK Hynix and Samsung -- are all focusing most of their production on high-bandwidth memory (HBM), which gets packaged with AI chips to optimize performance. Manufacturing HBMs requires the same tools as producing advanced logic chips, and they also require upwards of 3 times the wafer capacity of ordinary DRAM. With all of those hurdles in the way of boosting supply, memory makers are simply unable to keep up with growing demand.

For the first time ever, Micron has been signing long-term supply contracts with its largest customers, locking them into deals with price floors and volume commitments for up to five years. That's giving its business outlook more stability than it has had in prior cycles. If the memory market's story becomes less cyclical and more structural, the stock at its current level would look like a bargain, even after its impressive gains over the past year.

Cisco

Once the darling of the dot-com boom, Cisco (NASDAQ: CSCO) is back and helping lead the value stock index higher. The stock is the eighth-largest position in the Vanguard Morningstar Value ETF and is up more than 40% on the year.

Cisco is starting to benefit from a strong networking cycle, with heavy demand coming from both AI workloads and network traffic. Orders from telecom network customers surged 30% last quarter, with strong demand for both routers and optics. The company is seeing large orders come from both hyperscalers and neoclouds, and enterprise orders were also up a robust 21%.

Cisco's security portfolio is also beginning to benefit from the rise of agentic AI. Orders for its security products grew by a double-digit percentage last quarter, and the company recently made acquisitions to enhance its observability and security offerings.

Given that it's now trading at a forward P/E of 21, the stock might not remain in the value category for much longer. Based on their one-year forward P/E ratios, Cisco's valuation is actually higher, at 19.5, than either Nvidia (14.5) or Broadcom (19), with slower revenue growth.

Image source: Getty Images

Texas Instruments

Another tech stock in the value ETF that has had a strong run this year is Texas Instruments (NASDAQ: TXN), which is up nearly 50% on the year. The tech company serves a variety of industries, including the industrial, electronics, and automotive sectors. But as you probably guessed, the AI infrastructure build-out has also been a driver of its growth.

Within data centers, the company provides power management chips and high-voltage hardware, and the growing electrical intensity from AI is leading to strong demand. Its data center business is expected to double this fiscal year, although it remains a smaller part of its overall business. However, Texas Instruments is also seeing strong growth in the industrial space, with that segment's revenue up 30% last quarter. The company is still benefiting from the end of a previous build-out associated with the pandemic, and growing demand coming from things such as factory automation and smart grids.

Trading at a forward P/E of 30, though, the stock isn't cheap. However, it remains in the value category due to the cyclical nature of its business.

Geoffrey Seiler has positions in Broadcom. The Motley Fool has positions in and recommends Broadcom, Cisco Systems, Micron Technology, Nvidia, Texas Instruments, Vanguard Morningstar Growth ETF, and Vanguard Morningstar Value ETF. The Motley Fool has a disclosure policy.