Robeco Warns the AI Rally Is Becoming Increasingly Fragile

Robeco's Q3 Fundamental Equity Quarterly argues that exceptional earnings growth continues to support global equities, but rising valuations, tightening monetary policy and mounting AI concentration risks call for greater selectivity.

• The report expects strong earnings momentum to continue supporting markets, driven by AI investment, fiscal stimulus and resilient consumer spending, despite expensive valuations.
• Robeco warns that higher inflation and a more hawkish Federal Reserve could pressure long-duration technology stocks, while AI infrastructure spending increasingly benefits hardware suppliers rather than hyperscalers.
• The firm favours broader market leadership, highlighting value stocks, cyclicals, Europe and selected emerging markets as attractive opportunities as the rally widens beyond mega-cap technology.

Read the full quarterly outlook for Robeco's latest views on AI, global equities, emerging markets and portfolio positioning.