NEW YORK, June 21 (Reuters) - A blistering rally in U.S.

big tech stocks may be due for a breather, offering hope for

market segments that have been more tepid this year.

Although the S&P 500 is up 14.6% this year, most of

the broader index's gains have been concentrated in the

information technology and communications sectors - up 28.2% and

24.3%, respectively. The rest of the market has been more

subdued: the next best performing sector, utilities, is only up

9.5% year-to-date.

Many investors believe the long-term case for tech stocks is

solid, given their strong earnings and excitement over the

revolutionary potential of artificial intelligence. But huge

price gains, including Nvidia Corp's ( NVDA ) 155% year-to-date

run, have stirred worries that the tech rally might be

overheated.

Market laggards such as small caps and so-called value

stocks such financials and industrials may be looking like

bargains.

"Nvidia ( NVDA ) has been a rocket ship, and when things go up this

quickly you don't want to be the last one through the exit

door," said Michael Purves, CEO of Tallbacken Capital Advisors.

"People want to be invested in this equity rally, and if they

sell Nvidia ( NVDA ) the most likely places they are going to go is value

and cyclical stocks."

A rotation out of big tech could allay concerns of

concentration that have arisen in recent weeks, as the market

rally has once again narrowed to a handful of names. About 60%

of the S&P 500's total return of more than 14% for the year has

been driven by five companies whose shares have some of the

heaviest weightings in the index: Nvidia ( NVDA ), Microsoft ( MSFT ),

Meta Platforms ( META ), Alphabet, and Amazon.com ( AMZN )

, data from S&P Dow Jones Indices showed.

Some signs of big tech exhaustion emerged in the past

week. Nvidia ( NVDA ) shares are down 10% from their peak reached on

Thursday, taking the chipmaker out of its short-lived position

as the world's most valuable company. Nvidia ( NVDA ) is on track for a

4% decline for the week, while the S&P 500 is on track for a

less than 1% gain.

Closely watched economic data in the week ahead, including

inflation data on Friday, could also affect investor

positioning, as market participants gauge whether a nascent

slowdown in inflation is continuing.

Tech appears over-extended based on several barometers,

Purves noted. The Relative Strength Indicator of the Mag6 Index,

which measures the speed and magnitude of price changes in the

stock market's six biggest stocks, is at the highest it has ever

been, he said.

Meanwhile, the price ratio between the Nasdaq 100 and

the S&P 500 Equal Weight Index - a proxy for the

average stock - has jumped 9% since the beginning of June, he

said. The S&P 500, by contrast, is up nearly 4% this month.

Optimism is high among retail and institutional investors,

which some view as a contrarian indicator because it means the

bar for positive surprises is elevated. The AAII Sentiment

Survey was steady at 44% in the week ended June 19, about 8

percentage points above its historical average. Sentiment among

fund managers in the latest survey by BofA Global Research was

at its highest level since late 2021, with investors trimming

cash positions and increasing equity allocations.

The 13% month-to-date gain in the VanEck Semiconductor ETF

is a sign that AI-fever might have gone too far, said

Larry Tentarelli, chief technical strategist at Blue Chip Daily

Trend Report.

"In the near-term you could get a pullback in tech and

semis, and a healthy rotation into other parts of the market

that would keep this bull market going."

Even if a pullback does occur, there are few signs investors

would leave tech and growth stocks for long. Betting against

tech has been a losing proposition over the last decade, as the

Nasdaq 100 index has advanced more than 400% while the Russell

1000 Value is up about 70% over the same time.

The Russell Value index is up 5.6% this year. Investors

have given an even chillier reception to small cap stocks, with

the Russell 1000 down 0.5% year-to-date.

Tech could rebound fairly quickly as investors rush to

buy the dip. The Nasdaq 100 took five weeks to reach a new high

after falling as much as 9% in April.

"I don't get the sense that investors are looking to ring

the register on this and book gains," said Jason Alonzo,

portfolio manager at Harbor Capital Advisors. "If anything, I'm

seeing people who feel that they missed it trying to get in on

this trend."