Bloomberg Surveillance · Monday, June 29, 2026
Investment in AI is fueling significant growth for tech companies, particularly the 'Mag Seven,' with AI beneficiaries expected to grow earnings by 70% year-over-year in 2026. However, this has led to a highly concentrated market, with AI dominating indices and potentially impacting portfolio diversification.
“The funding and the spending on AI is coming from these hyperscalers, you know, hundreds of billions of dollars estimates eight hundred billion dollars this year. And it's going to fund other companies, right, the products of other companies. It's hardware, right, it's built out, it's industrial, it's energy, and it's hardware tech companies. And essentially the market said, we follow the money. I don't want to buy the spenders. I want to buy the AI beneficiaries.”
“So you've got AI dominating the Emerging Markets index. You've got AI dominating the US index, not in developed international because Korea is an EM for some strange reason. But you know, as a result, when you build out diversify portfolios, you're in a place where actually what you think is, you know, you're you're hedging some risk in different ways. Typically EM has been about energy and materials and financials. Now it's AI. So you're not actually buying different factors, you're buying the same factor, and so that becomes complicated in the short term and maybe even the long term of how you build out a portfolio.”