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US Perspectives: The ABCs of AI Investing

Regional Outlook
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Technology
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AI

US Perspectives: The ABCs of AI Investing

by Jose Rasco, CIO, Americas, HSBC Private Bank and Premier Wealth, Michael Zervos, Investment Strategist, HSBC Private Bank and Premier Wealth & Asad Chevel, Vice President, Portfolio Manager, Discretionary Investment Management
Apr 24, 2026

Highlights: Artificial Intelligence remains one of the most powerful structural growth drivers in the global economy, supported by rising adoption, measurable productivity gains, and accelerating enterprise integration. We upgrade our US and Global Tech sectors to full overweights, driven by a combination of improving earnings expectations and a meaningful valuation reset. Tech valuations have declined drastically, largely eliminating the sector’s valuation premium. At the same time, earnings expectations for the broader market continue to increase, with Tech continuing to lead.

  • Artificial Intelligence is no longer a speculative theme, it is a productivity-driven investment cycle. While the pace of monetisation is unfolding more gradually than early market expectations implied, earnings, capital investment, and real-world deployment continue to validate AI as a durable, broad-based driver of economic growth and market returns. AI adoption continues to accelerate across industries, with 88 per cent of companies now using AI in at least one business function (source: McKinsey). Adoption breadth is rising faster than depth, creating a long, multi-year runway as firms move from experimentation into full enterprise integration
  • The Tech valuation premium has all but disappeared. At the beginning of 2026, the S&P 500 was trading at ~26x forward earnings, while Tech was selling at ~37x. The repricing of technology, software, and AI have all but eliminated the Tech multiple premium. At the trough, the S&P was trading at ~20x earnings while Tech was trading at ~21x forward earnings for 2026. Given that Tech earnings are expected to grow 38 per cent in 2026, far above market expectations for earnings growth of 18 per cent, multiple expansion from these levels seems logical
  • The United States remains far ahead of the rest of the world in AI deployment, supported by stronger investment, more advanced digital infrastructure, and larger-scale enterprise projects. We believe US AI adoption is nearly double that of Europe (48 per cent vs. 25 per cent), with adoption in US Technology and Communication Services approaching 70 per cent
  • A major infrastructure cycle is underway, with rising investment in semiconductors, power generation, data centres, and cooling systems. The long-term investment case remains strong and fundamentally driven. AI-linked sectors remain particularly well-positioned for sustained growth

 

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