A bird’s view

Interesting chart from Asserta Asset Management: over the past three years, the strong performance of global equity markets has been driven mainly by Communication Services and Information Technology—more specifically by companies linked to the AI revolution. AI is clearly enhancing the earning power of many businesses, and AI infrastructure capex should continue to grow, creating further opportunities across the technology ecosystem. That said, valuations in parts of the “AI” segment have become increasingly stretched, and we would not be surprised to see other sectors start to outperform as they, too, capture the productivity gains from AI adoption. In this context, it remains essential for investors to diversify across sectors and stay disciplined and humble on company valuations.