US Stocks to Lag European Peers on AI

• AI will remain dominant, but US IT and communication services stocks are facing concentration risk and potential overvaluation.
• Europe is presented as an attractive diversification option, with strong financials and industrials, and less direct exposure to AI, benefiting from increased EU spending.
• Despite potential US tech slowdown, a positive global growth environment and cyclical strength suggest global equities can still deliver significant returns.

The analyst suggests diversifying away from the concentrated US AI-driven tech rally, noting potential overvaluation and concentration risk in large-cap US tech. Europe is highlighted as an attractive alternative due to its stronger financials and industrials, and less direct exposure to AI, offering a positive global growth environment for broader equity returns.