Gabriela Santos

In an economy that is good enough, banks are attractive. Earnings are strong from capital markets, loan growth is picking up including C&I loans, the regulatory environment is good, and defaults/delinquencies are very low.

Investors are enthusiastically following the money from hyperscalers to the entire AI ecosystem supply chain. Earnings growth is extraordinary: 100% for semiconductors, 40% for hardware and power. This AI CapEx surge is funding strong growth in public equities across these sectors.

Investors are punishing "Mag 7" companies for high AI Capex if revenue doesn't immediately follow, while simultaneously realizing that *someone* has to build the physical infrastructure for AI. This sentiment shift drives a rotation away from concentrated tech exposure into the "beneficiaries" of the spend. If AI requires massive power and physical build-outs, the companies providing the raw materials, energy, and industrial machinery will capture the Capex dollars regardless of which AI model wins. Long the infrastructure layer (Industrials, Materials, Utilities) as a hedge against Tech concentration. A broader economic slowdown reducing demand for commodities and energy.

Investors are punishing "Mag 7" companies for high AI Capex if revenue doesn't immediately follow, while simultaneously realizing that *someone* has to build the physical infrastructure for AI. This sentiment shift drives a rotation away from concentrated tech exposure into the "beneficiaries" of the spend. If AI requires massive power and physical build-outs, the companies providing the raw materials, energy, and industrial machinery will capture the Capex dollars regardless of which AI model wins. Long the infrastructure layer (Industrials, Materials, Utilities) as a hedge against Tech concentration. A broader economic slowdown reducing demand for commodities and energy.