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Equity markets are about more than AI

1月 07, 2026 - 4 min

People talk a lot about the potential bubble in the AI space and compare it a lot to the TMT bubble at the end of the '90s and early 2000s. And while there are a lot of similarities, there's also a lot of differences. And I do agree that some of the names exposed to AI are trading at very, very high expectations or discounting a very rosy scenario. At the same time, even though the sector is not really cheap, there's also companies in this space specifically related to infrastructure that are still trading at acceptable valuations as well.

 

What are the two or three key macroeconomic indicators you will be monitoring in the next few months, and why?

Some of the macro indicators we'll be focusing on the next few quarters are the potential cutting of interest rates globally, inflation, and the impact of all of that on the consumer and how they're spending. And why is that important? Well, first and for all, with lower interest rates, that fuels the economy, but also has a positive impact on valuation in the equity markets. Inflation is important because it resets the scene for how companies are spending, but it's very important as well for the consumer, especially in the US as the US consumer continues to be a big driver of economic growth.

 

How risky is market concentration in the US? What should investors be mindful of in this environment?

Concentration in equity markets is bigger than it's ever been. The US as a region weighs approximately more than two thirds of the total market cap in global industries. Within that, a single theme like AI represents roughly around 40% of total returns as well. And also the eight biggest companies in the world, all US companies, combined are bigger than the total market cap of the world ex-US in the developed world. That's enormous. It also creates a lot of risks. Because AI and those companies specifically represent such a big weight in returns of the market, not a lot has to happen in one of those companies to pull the market down. But people have to realise that the market is more than just AI and there's also opportunities there.

 

What are some of the biggest opportunities that could arise for equities in the current macroeconomic landscape?

We see great opportunities in areas like water and power, power generation, and connecting all of that to the grid. That's driven partially by the build out of AI. We all know that data centers need a lot of power, but also water to cool the semiconductors. But on top of that we have the rebuilding, the re-industrialisation, of the US and parts of Europe as well, that is leading to a lot of extra demand again for power and the connection for that too. Within that power generation, there's also going to be a big focus on renewables, as renewables are typically amongst the cheapest and the quickest to deploy. Next to power, we also see great opportunities in the pharmaceutical sector or in healthcare in general. Pharmaceuticals have underperformed significantly over the past three years. Valuations are at a very low level today, and that's mainly driven by a lot of potential negative news around tariffs, around pricing etc.

But recent agreements between pharmaceutical companies and the White House have removed a lot of that potential negative overhang. So we see great valuation uplift here. As part of the agreements with the White House, a lot of pharmaceutical companies have also committed to building new facilities in the US, and all of those facilities will need new testing equipment, production equipment, analytical equipment, and the producers of those also have great opportunities in the next couple of years.

 

What long-term growth drivers do you believe will shape equity markets?

So for 2026, let's hope that the biggest theme will be peace in Ukraine, and when we get peace in Ukraine, we need to rebuild that country, and when the country's going to be rebuilt again, there's going to be a lot of opportunities for power, for water, but also for construction companies in both Europe and the US.

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