Our first half 2026 market outlook explores the risks posed by elevated valuations and concentrated AI leadership — and outlines practical steps investors can take to help build more resilient portfolios.

We see one question increasingly dominating investors’ conversations: Are we in an AI-fueled bubble?

Aspects of today’s markets remind us of previous bubbles — historically high valuations, growing debt, and a dismissive attitude toward risk. On the other hand, many AI leaders are powerful businesses (not the case during the dot-com bubble), and they really might change the world (unlike the subprime mortgages that fueled the 2008 financial crisis).

No one knows for sure if we’re in a bubble. But for investors, the important question ultimately isn’t whether we’re in a bubble — it’s how to invest when we might be. That’s the focus of this issue of Prism. We think part of the answer is to try to win by not losing.

Our top three recommendations for investing through a possible AI bubble:

1. Evaluate your portfolio’s exposure to AI risks

2. Consider reducing concentrated positions

3. Manage the tax impact of any changes

About Prism

Prism, released in June and December every year, offers the &Partners Investment Team’s insights on positioning client portfolios for the months ahead. It includes: 

  • Our top three investment recommendations
  • The macro analysis that informs our perspective
  • Our outlook for U.S. equities, international equities, fixed income, and alternative investments
  • Perspectives from our investment partners

By distilling the knowledge of our Investment Team and network, Prism gives financial advisors the unique, actionable insights they need to help clients thrive.

In this issue we cover:
  • Investment recommendations
  • Zoom out: Macro analysis
  • Zoom in: Asset class outlook
  • Partners’ perspectives: J.P.Morgan Asset Management, PIMCO, Constitution Capital, Carlyle, and KKR
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