Buy AI Stocks on Any Pullback in Rally, Say Barclays Strategists

Barclays Plc strategists suggest that any pullback in AI-related stocks could be an opportunity to buy as valuations are still reasonable despite their significant gains this year. The expanding AI economy could help the primary beneficiaries grow into their valuations over the longer term. The strategists’ belief comes in contrast to growing concerns that the AI frenzy has run too hot. However, the strategists said that this time it is unlikely the outlook will be the same as leadership is concentrated in profitable businesses, rather than speculative ones. The US stock outperformance carries a high price tag, and diversification into international equities is warranted. Last year, Emmanuel Cau correctly predicted a short-term bounce in equities on the back of defensive positioning.