Evergreens Insights: Between Technological Revolution and a Return to Market Realities

At the start of 2026, investors entered the year with cautious optimism. The prevailing scenario was built on continued economic growth, gradually stabilising inflation and central banks following a relatively predictable monetary path. In other words, an environment broadly supportive of risk assets.

Six months later, the picture is more nuanced. While markets have continued to advance, much of that performance has been driven by a limited number of themes and stocks. Artificial intelligence remains the primary engine of market gains, while questions surrounding valuations, market concentration and monetary policy are becoming increasingly important.

If there is one theme that defines the first half of 2026, it is undoubtedly AI.

The ongoing technological revolution continues to fuel substantial demand for digital infrastructure, data centres and the semiconductor components that power them. This has particularly benefited companies operating in semiconductors and memory technologies, some of which have delivered exceptional returns since the beginning of the year.

Unlike some speculative episodes of the past, today’s growth is supported by tangible economic fundamentals. Earnings continue to rise, order books remain strong, and companies across the sector are benefiting from sustained demand.

Nevertheless, financial history encourages caution. As investment continues to accelerate and valuations reach ever higher levels, comparisons with the late 1990s have naturally begun to re-emerge. Without suggesting that a bubble is forming, some investors are questioning whether current growth expectations can be sustained indefinitely.

History shows that markets often adjust before corporate earnings begin to deteriorate. After several years of exceptional expansion, even a period of stabilisation can be enough to trigger significant market corrections.

One of the most important lessons of this first half of the year concerns the structure of financial markets themselves.

Many investors rely on index funds and ETFs to gain broad exposure to global markets. However, behind this apparent diversification lies an increasing level of concentration. A significant portion of the performance of major global indices is now being generated by a relatively small group of companies with direct exposure to artificial intelligence.

This phenomenon is not limited to the United States. It is equally visible in Taiwan, South Korea, Japan and China, where a handful of technology-related companies are becoming increasingly dominant within local indices.

The trend raises an important question: do investors truly own the diversified portfolios they believe they do? Today, even some actively managed or thematic strategies can end up with substantial exposure to the same companies because of their growing importance within global markets.

This concentration can enhance performance when markets are rising, but it may also become a source of risk when sentiment begins to shift.

While AI dominates headlines, other themes are also benefiting from major structural transformations.

Copper remains one of the strategic metals of the energy and digital transition. Essential for electricity networks, data centres, electric vehicles and numerous technological applications, it continues to benefit from robust demand while supply remains constrained.

Energy storage is also becoming an increasingly important investment theme. Across Europe, the rapid expansion of solar and wind power is highlighting the need for more effective storage solutions capable of managing fluctuations in electricity production.

Against this backdrop, companies involved in battery technologies and energy infrastructure have attracted renewed investor interest. More broadly, recent geopolitical tensions have once again underscored the strategic importance of energy independence for Europe.

Beyond individual sectors and companies, market performance will also depend heavily on central bank decisions.

In the United States, the change in leadership at the Federal Reserve marks the beginning of a new chapter. Investors are closely monitoring what approach the new leadership will take towards inflation and, equally importantly, how monetary policy will be communicated going forward.

For years, markets have benefited from a high degree of visibility thanks to the Federal Reserve’s forward guidance. Any move away from this approach could increase uncertainty and lead to greater volatility, particularly in bond markets.

At the same time, interest-rate developments continue to have a direct impact on asset valuations across equities, real estate and commodity markets.

The first months of 2026 have also seen the re-emergence of certain behaviours reminiscent of previous speculative periods.

The growing popularity of leveraged ETFs, including products linked to individual stocks, illustrates an increasing appetite for speculative strategies. While these instruments can amplify gains, they also significantly increase potential losses.

In many ways, this search for quick returns recalls some of the dynamics observed during the cryptocurrency boom of the early 2020s.

Although this is not necessarily a warning sign in itself, it reflects a market environment in which abundant liquidity and enthusiasm surrounding AI can sometimes push valuations beyond what fundamentals alone may justify

The resurgence of initial public offerings has been another defining feature of the first half of the year.

The most striking example has undoubtedly been the IPO of SpaceX. Supported by Elon Musk’s reputation and a compelling narrative combining artificial intelligence, global connectivity and next-generation infrastructure, the listing generated considerable enthusiasm among investors.

Beyond the transaction itself, the episode also highlights changes in the way markets operate. Several index providers have adjusted their inclusion rules, enabling certain companies to enter benchmark indices more rapidly than in the past.

This development underlines the growing importance of passive investment flows in price formation. Once a company enters a major index, substantial amounts of capital are automatically allocated to its shares, regardless of valuation levels.

Despite these risks, several factors support a balanced outlook.

The world’s largest technology platforms – often referred to as hyperscalers – are beginning to demonstrate the profitability of the massive investments they have made in artificial intelligence and data-centre infrastructure.

Microsoft, Google and Meta, among others, have faced a straightforward question: would the hundreds of billions invested in digital infrastructure ultimately generate adequate returns? Increasingly, the evidence suggests that the answer is yes. Cloud services, generative AI and advanced computing capabilities are already contributing meaningfully to revenue and earnings growth.

In other words, while some valuations may appear demanding, a portion of the investments that looked highly speculative only twelve months ago is now producing tangible and measurable results.

The outlook remains mixed.

On the one hand, economic fundamentals continue to show resilience, consumer spending remains relatively robust in several regions and the AI revolution continues to unfold. On the other hand, valuations remain elevated, market concentration is increasing, and geopolitical as well as monetary-policy uncertainties continue to fuel volatility.

In this environment, diversification remains as important as ever. The remarkable performance delivered by certain themes should not overshadow the reality that no sector, no matter how promising, is immune to economic and market cycles.

History shows that major technological innovations create extraordinary opportunities, but it also reminds us that periods of enthusiasm are inevitably followed by phases of consolidation and reassessment. Artificial intelligence is unlikely to be any exception.