Equity outlook: What other investment opportunities exist outside of big tech and artificial intelligence?

Even though AI has taken over markets in recent years, investors can still get exposure without buying AI stocks directly

In recent years, technology giants with an advantage in artificial intelligence (AI) have dominated equity market returns; however, as competition intensifies, enthusiasm is waning and chip stocks appear nervous.

There have also been concerns about a possible AI bubble, but it's still unclear which businesses will succeed or fail in the long run. Despite a number of global challenges, including the ongoing US-Iran conflict, unstable energy markets, and ongoing inflation, 91% of the 33 strategists surveyed in a recent survey by fund management firm Natixis Investment Managers expressed optimism that AI will be a key driver of market performance in the second half of the year. Additionally, it revealed that 88% of respondents anticipate the AI industry to grow, while only 12% think the bubble will burst in the second half of the year.

However, should investors view that disruption as a chance?

How to invest in AI beyond big tech.

The AI wave gives rise to two different approaches.

One is to try to capitalize on AI's growth potential without being restricted to the major players like the Magnificent 7: Apple (NASDAQ:AAPL), Microsoft, Amazon, Alphabet (NASDAQ:GOOGL), Meta, Nvidia (NASDAQ:NVDA), and Tesla.

Watch the entire video here. According to Helen Jewell, international chief investment officer of fundamental equities at BlackRock, investors may find more upside with less volatility associated with high valuations and market concentration if they take a broader view of the AI story.

Examining the infrastructure and power investment required to support the AI boom and the wider transition to electrification it has accelerated is one approach. According to Jewell, governments' emphasis on energy independence is "turbocharging" this trend.

"Compared to some of the most highly valued areas of the market, these sectors may offer exposure to structural growth trends while potentially offering more diversified return streams, attractive valuations, and lower concentration risk," she continued.

Where will the next significant global equity opportunities be found?

A few industries, including banks, aerospace and defense, and industrials, drove market gains in 2025.

Because valuations are rising, it is anticipated that all three areas will continue to do well. European banks in particular appear promising; according to Jewell of BlackRock, they have demonstrated strong earnings even though interest rates have decreased from recent highs.

She continued by saying that banks are using AI more frequently to update their own systems. Consolidation and improved integration throughout the European banking and capital markets system point to a more lucrative industry and, consequently, higher potential returns for investors.

How to invest differently from AI.

The AI theme can also be played backwards. If an excessively large portion of your total investments are concentrated in a single stock, area, or industry, concentration risk becomes an issue; in other words, you shouldn't put all of your eggs in one basket.

In the event that AI corrects and share prices decline (or the purported bubble bursts), investors will have some protection in their portfolio if they are exposed to various uncorrelated market segments.

Although the healthcare industry can also benefit from AI, Jewell mentioned it as a strong diversification strategy. The industry used to trade at a premium to the market, but it is currently trading at a 15% discount, with earnings growth second only to that of technology.

She also prefers Latin America, which has little to do with the AI trade. Despite making up only 0.8% of the MSCI All Country World Index (ACWI), it is trading at lower valuations than the historical average and contributes 7% of the world's GDP.

Without any direct exposure to AI, the UK's FTSE 100 index has outperformed international stocks in terms of total return. In general, banks and oil companies have benefited from higher energy prices and rising interest rates over the last five years, while defense has also gained prominence again due to the ongoing conflicts worldwide.

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