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2026 INVESTMENT OUTLOOK

Pushing limits

Dec 2 | AI’s buildout is dominated by a handful of companies that are spending on a scale so large, it has macro impact. The challenge for investors is reconciling whether AI will generate revenues of the same order of magnitude as the huge capital spending plans.

Investment themes

  • 01

    Micro is macro

    The capital spending ambitions tied to the AI buildout are so large that the micro is macro. The overall revenues could justify the spend – yet it’s unclear how much will accrue to the tech companies building AI. We stay pro-risk and overweight U.S. stocks on the AI theme. We also see this as a great time for active investing.

  • 02

    Leveraging up

    The AI buildout’s investment needs are front-loaded and while revenue gains are back loaded. That creates a financing “hump” requiring leverage. Yet a levered financial system can create vulnerabilities. We see opportunities for AI exposure in in both public and private credit markets. We turn tactically underweight long-term Treasuries.

  • 03

    Diversification mirage

    In markets driven by only a few forces, “diversifying” away from these is a bigger active call than before. We think portfolios need a clear plan B and readiness to pivot quickly. Traditional diversifiers like long-dated bonds offer less cushion against risk asset selloffs. We prefer idiosyncratic return sources in private markets.

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