Stock markets are soaring amid AI enthusiasm, but that does not necessarily mean we are in bubble territory, says Markus Müller, the Private Bank’s head of the CIO office and Chief Investment Officer for Sustainability. “The difference now is the foundation. Equities are showing strong earnings, robust cash flows and disciplined balance sheets. That's not typical bubble behaviour,” Markus says, though he also points to the need for careful risk management. “Overinvestment is a risk. Global data centre spending surged.”

This tension is on display in the current U.S. earnings season, Markus says. “Fundamentals are strong, but the pace of investment and market concentration require respect. The top 10 US companies now represent over 20% of the global equity market value. And tech alone is about 35% of US market cap. With that concentration, risk management is essential.”

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