SKN | BofA’s AI Outlook for 2026: Where Institutional Capital Is Looking Beyond the Obvious

Key Takeaways:

• Bank of America has identified several under-the-radar equities positioned to benefit from the AI expansion beyond headline technology leaders.
• The opportunity lies in infrastructure, enablers, and second-order beneficiaries, not only in consumer-facing AI names.
• For HNWIs, disciplined exposure to AI themes requires selectivity, structure, and risk containment.

As artificial intelligence continues to reshape global markets, attention is increasingly shifting from headline technology leaders to lesser-known companies positioned deeper in the AI value chain. Bank of America’s identification of under-the-radar stocks for 2026 reflects a broader institutional recognition: the next phase of the AI cycle may reward enablers and infrastructure providers rather than the most visible beneficiaries.

Why the AI Opportunity Is Entering a More Selective Phase

The initial phase of the AI boom was driven by scale, narrative, and platform dominance. Valuations expanded rapidly as capital crowded into a narrow group of names associated with model development and cloud distribution. As the theme matures, the focus is shifting toward earnings translation, cost efficiency, and operational leverage.

Under-the-radar AI plays often sit outside mainstream indices, operating in areas such as semiconductors, data infrastructure, industrial automation, and enterprise integration. These businesses may not define the AI narrative, but they enable it. For institutional investors, this layer of the market offers exposure with potentially lower valuation risk and more tangible cash-flow linkage.

Reading Institutional Signals Without Overexposure

Institutional stock selections around AI should be interpreted as thematic signals rather than direct allocation instructions. The emphasis on less visible names suggests that large allocators are increasingly cautious about crowding risk and valuation compression at the top of the market.

For high-net-worth investors, this reinforces the importance of structure over speculation. AI exposure should be framed as a component of a broader portfolio—balanced against defensive assets, income strategies, and jurisdictional diversification—rather than as a concentrated growth bet.

Integrating AI Themes Into a Risk-Mitigation Framework

Within globally structured portfolios, AI-related equities can serve a strategic role when aligned with clear risk parameters. Exposure can be layered through diversified holdings, selective active mandates, or thematic allocations that limit single-name dependency.

Importantly, AI-driven volatility is likely to remain elevated. Regulatory scrutiny, technological displacement, and capital intensity can all introduce asymmetric risk. Sophisticated investors should therefore focus on businesses with strong balance sheets, pricing power, and relevance across multiple economic scenarios.

Looking ahead to 2026, the sustainability of the AI boom will depend less on innovation headlines and more on execution, monetization, and capital discipline. As market leadership broadens, opportunities may emerge in overlooked segments—but only for investors prepared to separate structural growth from short-term enthusiasm. For HNWIs, the objective is not to chase the AI boom, but to integrate it intelligently within a resilient, long-term wealth strategy.

For a confidential discussion regarding how AI-related opportunities may fit within your cross-border investment and custody structure, contact our senior advisory team.

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