How to play the artificial intelligence theme in markets the Chris Wood way

Artificial intelligence (AI) is on the foothills of the next bubble, believes Christopher Wood, global head of equity strategy at Jefferies. The six Big Tech stocks, defined as FAANGM (Alphabet, Amazon, Apple, Meta, Microsoft, and Netflix), he said, may not remain the dominant thematic for the next decade as they were for the last ten.

“There is no doubt that the pain trade is getting ever more painful for those equity investors still defensively positioned as confidence grows that AI provides the next productivity-enhancing growth narrative for the coming decade. It is also conveniently, giving continuing inflationary concerns, deflationary in nature. AI, so the thinking goes, is in the foothills of the next bubble,” Wood wrote in GREED & fear,