Despite slowing enthusiasm for technology giants with an edge in artificial intelligence (AI) and warnings of a potential AI bubble, a recent survey by Natixis Investment Managers found widespread optimism among strategists.
The survey revealed that 91% of 33 strategists interviewed are optimistic that AI will be a driving force behind market performance in the second half of 2026. Furthermore, 88% expect the AI sector to accelerate, with only 12% believing its bubble will burst in the same period.
Helen Jewell, international chief investment officer of fundamental equities at BlackRock, suggests that investors could find more upside with less volatility by looking at the AI story through a wider lens. One strategy involves investing in infrastructure and power, which are needed to facilitate the AI boom and the broader shift towards electrification. These sectors may offer exposure to structural growth trends, diversified return streams, attractive valuations, and lower concentration risk.
Beyond AI, sectors like banks, aerospace and defence, and industrials are expected to continue positive performance, with valuations increasing. European banks, in particular, look promising due to resilient earnings despite calming interest rates and their increasing adoption of AI to modernise systems.
For diversification, healthcare is cited as a strong play, currently trading at a 15% discount to the market despite historical premiums. Latin America is also highlighted for its low correlation to the AI trade and lower valuations.