From the studio

Video: Allocating Assets — portfolio strategy with Adrian Zuercher and Mark Andersen (8:35)
Video: Tech analyst Sundeep Gantori on earnings and US tech export controls (1:54)
Podcast: Kurt Reiman on Trump's tariffs after the IEEPA court ruling (13:06)
Podcast: Economist Dean Turner on Swiss-EU trade talks (17:17)
Podcast: Positioning with Giovanni Staunovo and Wayne Gordon (23:00)

Thought of the day

US equities on Tuesday rose to their highest level since February, with tech stocks leading broader market gains despite data showing signs of slowing economic activity. The Nasdaq rose 0.8%, and the S&P 500 stood just 2.8% below its all-time high.

Market swings can be expected, as investor sentiment remains susceptible to fresh trade and economic headlines. However, we have also consistently highlighted that intact secular trends should continue to support equity gains.

Innovation remains a key driver of long-term equity performance, and recent developments underscore our strong conviction in the potential of our Transformational Innovation Opportunities (TRIOs), including Artificial intelligence (AI), Power and resources, and Longevity.

AI momentum is set to continue in the years ahead. The main takeaways from the recent tech headlines are that underlying demand for AI compute is robust, and big tech companies remain committed to investing strongly in AI amid a broadening market. In fact, new entrants to the AI market are now spending at a faster pace, with capex likely rising over 80% this year and another 50% in 2026. We believe global AI capex spending is on track to grow 60% this year to USD 360bn and a further 33% next year to USD 480bn. Longer term, we expect capex to reach USD 960bn by 2030, when global AI revenues could amount to USD 2.6tr. While chip-related controls amid intensifying US-China tech rivalry could weigh on investor sentiment in the near term, markets are likely to return to fundamentals, which remain supportive.

Accelerating electricity demand bodes well for power and resources companies. Facebook parent Meta signed a 20-year contract to buy over 1,100 megawatts of nuclear electricity starting in mid-2027 as its AI energy demands continue to rise. Meanwhile, Microsoft has agreed to purchase energy from a shuttered nuclear plant for two decades after it is expected to go back into service in 2028. Without taking single-name views, these developments are in line with recent earnings from companies in the power and resources space, which point to strong investments in AI data centers as well as power utility end-markets. With new technologies accelerating global electricity consumption and the ongoing electrification of the economy, we continue to believe power and resources opportunities will be among the major drivers of equity market performance in the coming years.

Health care is one of the primary beneficiaries of increasing human lifespans. Health care stocks came under pressure amid concerns about US pharmaceutical tariffs, drug pricing policy, and the health insurance sector. But Trump’s intended actions on drug pricing will likely face legal challenges. The combination of policy clarity over time, attractive valuations, and potential upside to earnings estimates should also lead to good performance for the sector, in our view. Overall, we anticipate a substantial health care market opportunity, with revenues reaching USD 2.2tr globally by 2030, supported by rising demand for treatments targeting obesity, oncology, Alzheimer’s, and cardiovascular disease as life expectancy rises and populations age.

So, for investors looking to capitalize on secular trends for long-term gains, we expect our TRIO themes to offer durable growth that should persist beyond short-term market volatility. We recommend a balanced AI exposure across high-growth semiconductors and resilient software and platform companies. Within power and resources, we like the electrification value chain for its exposure to growing electricity demand, data center capex, and power grid upgrades. In longevity, we prefer select pharma, medtech, and health care service providers, as well as select companies in nutrition and wellness.