A senior Wells Fargo strategist says the artificial intelligence investment boom is far from over, but investors may want to rethink how they position for it as valuations stretch in the biggest technology names.
In a new interview with CNBC, Paul Christopher, head of global market strategy at Wells Fargo, says the bank continues to see AI capital spending as a core market driver in 2026.
According to Christopher, investors should consider diversifying their holdings away from the most crowded part of the AI trade and into cheaper corners of the market.
“We see the AI CapEx trend, the spending trend on equipment continuing to grow next year. We think that’s a reliable trend. But we don’t want to just play that one trend alone because, as we’ve seen, some of those Mag 7 stocks can get rather extended at points. So you try to look for alternative ways, subsidiary ways, if you like, ancillary ways, for example, data centers.
Data centers allow you to take a position in something like industrials or utilities, which have lower price-to-earnings ratios. They’re not as overpriced. They’re not as extended as tech stocks at their worst.”
Beyond AI, Christopher says Wells Fargo believes the precious metals theme still has momentum, though timing matters.
“But we really think the trends that have been in place will remain in place. And so the gold trend, the precious metals trend, we think has a life to it. You just want to be a little bit careful here. We would be buying on pullbacks.
When gold pulled back to $3,800 to $3,900 an ounce, we were buyers then. We still like the precious metals, but we would buy on the pullbacks and not chase.”
Wells Fargo is not only firm of the view that the smart money is rotating capital into other market sectors. Citi recently said that power generation is the best risk-reward investment theme for the AI trade next year. Meanwhile, Rich Dad Poor Dad author Robert Kiyosaki urged investors to be disciplined before entering silver.
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