The first half of 2026 has left a clear conclusion for global investors: artificial intelligence has continued to set the pulse of the markets, but with an important nuance. According to the weekly analysis by Yves Bonzon, Chief Investment Officer (CIO) of Julius Baer, during these six months, the key to beating the market was being positioned in the right segment of the tech universe. “In short, the first half of 2026 was clear: either you held semiconductor stocks—but not just any stock—or you didn’t,” Bonzon summarizes in his latest CIO Weekly.
The firm explains that the stock market rally has not been led by the traditional US megacap tech giants, but rather by companies more specialized in DRAM memories and NAND chips linked to the development of artificial intelligence infrastructure. In fact, the SOX semiconductor sector index has skyrocketed by nearly 100% in just three months, consolidating itself as the main engine of global stock markets.
However, one of the surprises of the year has been that, despite the increased cost of capital for major US cloud computing companies—one of Julius Baer’s central investment theses for this year—the US market has not suffered a significant correction. According to Bonzon, leadership has broadened, and gains “no longer depend solely on the Magnificent Seven, but on a wider universe of companies benefiting directly or indirectly from the AI investment cycle.”
In this context, the financial institution believes that a structural change has occurred in the markets, forcing a rethink of portfolio construction. “We have entered an industrial cycle in which a larger number of smaller players benefit from structural trends such as artificial intelligence, electrification, or strategic autonomy,” Bonzon points out. For this reason, Julius Baer considers that diversification is once again becoming an essential source of return generation, in addition to being a classic risk control tool.
Another element that has marked the first half of the year has been the unexpected strength of the US dollar. Contrary to the bearish market consensus, Julius Baer never abandoned its positive outlook on the US currency against the rest of the G7 nations. As Bonzon explains, the geopolitical conflict between the United States and Iran, renewed investor enthusiasm around AI, and Kevin Warsh taking the helm of the Federal Reserve have reinforced the appeal of the dollar and US fixed income.
This view has also led the institution to reduce its exposure to gold during the second quarter. After starting the year with strong gains, the precious metal corrected sharply and has accumulated drops of 7% so far this year, after registering declines of over 10% in June alone.
Looking ahead to the second half of 2026, Julius Baer maintains a cautious approach. Although it recognizes that artificial intelligence will continue to be the main market catalyst, it warns of the growing risk of over-concentration in specific technology segments. Bonzon stresses that “markets are increasingly dependent on a small number of very powerful narratives, while the outcomes remain highly uncertain.”
Consequently, the entity recommends avoiding extreme positions and paying closer attention to sectors that have been less explored recently, such as defensive consumer goods or healthcare, whose relative valuations have become more attractive after several quarters of being eclipsed by the tech boom. “This is not a time for extreme stances, but for humility and the discipline of diversification,” the Julius Baer CIO concludes.
