US Stocks to Lag European Peers on AI
Watch on YouTube ↗  |  February 16, 2026 at 08:32 UTC  |  2:57  |  Bloomberg Markets
Speakers
Adam Lynn — Market Strategist / Guest Speaker
Interviewer — Host

Summary

  • The speaker argues that while US "Communication Services" and AI stocks have driven recent performance, the rally is becoming overly concentrated, prompting investors to look for diversification.
  • A rotation is occurring away from the US Dollar and high-valuation US software/asset managers into "Rest of World" equities, specifically Europe and South Korea.
  • Europe is highlighted not as a tech play, but for its cyclical strength in Financials and Industrials, which are now performing well in a global growth environment.
  • South Korea is identified as a specific "hardware/AI infrastructure" play due to the structural demand for High Bandwidth Memory (HBM) and DRAM, which decouples it slightly from US software volatility.
Trade Ideas
Ticker Direction Speaker Thesis Time
GERMANY /GERMANY / EUROPEAN EQUITIES /FINANCIALS /INDUSTRIALS
LONG Adam Lynn
Market Strategist / Guest Speaker 		"What's been its weakness for the past few years is now actually playing to its strengths... It's got financials which are performing pretty well. It's got industrials." The US market is heavily skewed toward expensive tech. As global growth expectations rise ("nice cyclical environment"), capital is rotating into undervalued cyclical sectors (Financials/Industrials) where Europe has a heavy weighting. This acts as a valuation floor and a diversification play against US concentration. LONG Europe as a cyclical/value alternative to US Tech. Contagion from a sharp US correction could drag down global betas despite better valuations. 1:31
KOREA /MEMORY CHIPS
LONG Adam Lynn
Market Strategist / Guest Speaker 		"Korea will be amazing because we still got this DRM story, this high band memory story going on." Even if US software/equities lag, the physical infrastructure required for AI (High Bandwidth Memory/DRAM) remains in a structural bull market. South Korean manufacturers control this supply chain, making them a "pick and shovel" play that can outperform even if US tech sentiment sours. LONG Korea for exposure to the semiconductor memory super-cycle. A collapse in global AI capex spending would directly hit memory chip demand. 0:41
SOFTWARE /ASSET MANAGEMENT
AVOID Adam Lynn
Market Strategist / Guest Speaker 		"We've seen some of these asset management companies, these software companies, which is getting attacked... people are going to park in areas which aren't as exposed." The market is punishing sectors "adjacent" to the crowded AI trade that do not have the same earnings durability. As investors rotate into cyclicals (Europe) or pure hardware (Korea), high-multiple US software and asset managers are becoming sources of funds (sold to buy other assets). AVOID/SHORT due to rotation risk and negative price action ("getting attacked"). A resurgence in US bond yields dropping could reignite a bid for long-duration software assets. 0:57
US DOLLAR
SHORT Adam Lynn
Market Strategist / Guest Speaker 		"If you take things like the dollar, people are trying to reduce dollar exposure, then Europe is a good avenue for people to look at." The diversification trade (buying Europe/Korea) requires selling USD to buy foreign currencies (EUR/KRW). If the "US Exceptionalism" trade fades, capital flows will reverse out of the Dollar, weakening it relative to peers. SHORT US Dollar as a function of global diversification flows. A global recession or geopolitical shock usually triggers a "flight to safety" into the USD. 1:41