Wealth Managers Bet on AI Despite US Valuation Concerns

Arun Sai, senior multi-asset strategist at Pictet, maintains an overweight stance on equities, favoring emerging markets over US stocks. He points to a projected 56 percent earnings growth in emerging regions, noting that AI-driven gains are now spreading into industrials and utilities. However, Sai remains neutral on the US market, citing demanding valuations where 70 percent of earnings growth stems from a handful of mega-cap stocks. He warns that this concentration leaves little margin for error should sentiment shift.

Adrien Roure, multi-asset portfolio manager at Indosuez, offers a different perspective by remaining positive on US equities. He argues that the current investment cycle is far from exhausted, particularly within the semiconductor segment. Roure advocates for broad diversification, including small and mid-cap stocks, which he believes could gain momentum from potential stimulus measures. While he shares concerns regarding short-term volatility in Asian tech hubs like Taiwan and South Korea, he views any market correction as a tactical entry point for investors.

Asset allocation strategies also diverge regarding defensive positions. Pictet has upgraded gold to overweight, anticipating that easing real interest rates will bolster the non-yielding asset. Conversely, Indosuez remains focused on fixed income, favoring short-dated euro area maturities and high-quality credit, while expressing caution toward the surge in US debt issuance from major technology firms.