The AI Trade Is Becoming Too Concentrated—and Investors Should Look Beyond the Obvious Winners

Nuveen argues that artificial intelligence remains the dominant force in global financial markets, but the next phase of the AI cycle will reward selectivity rather than indiscriminate exposure to technology stocks.

• The firm warns that an increasingly small group of AI-related companies now drives equity markets, earnings growth and capital spending, creating concentration risks that leave portfolios vulnerable if sentiment shifts.
• Rather than abandoning AI, Nuveen recommends focusing on businesses capable of monetising AI investment, alongside infrastructure, utilities, municipal bonds, private credit and real estate that benefit indirectly from AI-driven demand.
• The report argues that diversification has become more important—not less—as investors navigate persistent inflation, elevated energy prices and a global economy increasingly dependent on AI investment to sustain growth.

Read the full outlook for Nuveen's midyear investment themes, portfolio construction ideas and preferred asset allocation for the remainder of 2026.