Overview
- Portfolio managers expect artificial intelligence to remain the dominant market theme in 2026, with increasing scrutiny on whether benefits spread beyond a narrow group of mega-cap tech leaders.
- Valuations and narrow leadership are key vulnerabilities, with JPMorgan Wealth Management’s Kristin Lemkau cautioning against overenthusiasm and others stressing the need for earnings and capex to prove out.
- Risks to the AI value chain include chip demand and supply constraints and potential technology shifts such as TPUs versus GPUs, leading analysts to anticipate bouts of volatility and drawdowns next year.
- Funding durability is in focus as large data-center commitments and rapid private-credit growth raise spillover risks for traditional bond markets, alongside warnings that bond investors will punish weak fiscal credibility.
- Strategists advocate deconcentrating portfolios into emerging markets and the UK with selective corporate credit, while some also highlight opportunities in AI enablers and potential early-2026 strength in small caps.