US technology stocks saw a significant rally in 2025, pushing valuations to elevated levels. As a result, downside and upside risks are now more evenly balanced than in previous years. While artificial intelligence (AI) remains a transformative force with considerable long-term potential, uncertainty around AI adoption remains. This supports our selective approach, with exposure limited to three (Apple, Microsoft, and Nvidia) of the ‘Magnificent Seven’, rather than a broad allocation.
The conversation around the energy transition continues to evolve. While climate change remains critical, the focus is shifting towards energy efficiency and the integration of AI across industries to drive productivity gains. We aim to identify opportunities in a world where digitalisation and decarbonisation go hand in hand. As we move into 2026, sustainable investment themes such as Clean Energy and Resource Efficiency remain structural long-term winners. For example, global investment in renewables is accelerating: the International Energy Agency estimates that clean energy investment in 2025 was double that of fossil fuels, totalling approximately $2.2 trillion. This trend reinforces the energy transition and energy efficiency narrative, even amid political headwinds such as anti-renewables rhetoric in the US.
Industrials, utilities, and infrastructure sectors are emerging as key beneficiaries of digital transformation and AI adoption, providing diversification beyond the technology giants. However, while AI accelerates innovation and operational efficiency, it also raises concerns about energy consumption, as data centres and semiconductor manufacturing are energy-intensive businesses. This creates opportunities for companies within our Resource Efficiency theme to lead in delivering energy-efficient solutions across industries through innovation and practical AI adoption technologies.
