Within the technology sector, investors have shown divergent attitudes toward artificial-intelligence-related names, with semiconductor stocks such as Intel and AMD posting solid gains since the start of the year while software names lagged, said Nicolas Bickel, who heads discretionary wealth management and investment research at Edmond de Rothschild Private Banking.
Since mid-July, however, software names have recovered sharply while certain segments of the semiconductor market have softened, he noted.
At the start of the year, investors favored companies that could generate cash flows quickly despite surging AI-related investment needs and constrained supply of key components. Semiconductors then underwent several correction phases, initially driven by questions around hyperscaler spending and later by worries about AI-related risks, Bickel said.
"One can ask whether warnings about AI risks are part of a communications strategy," he said. "The major American and Chinese players have no interest in slowing the development of this technology."
Cybersecurity names have rallied significantly while traditional software providers remain under pressure. Strong earnings from hyperscalers and semiconductor companies have since renewed momentum for the AI theme.
On currencies, Edmond de Rothschild's base case calls for a mild appreciation of the dollar against the euro and the Swiss franc. Monetary policy divergence between the United States and Europe is not large enough alone to drive a bigger move, Bickel said. The US economy benefits from faster growth, deep capital markets, relatively abundant and affordable energy, and Fed credibility in targeting 2 percent inflation.
Foreign demand for US Treasuries could weaken further — investors in Japan now earn higher domestic yields — but fundamentals still support a stronger dollar.
Bickel also addressed the upcoming meeting between Xi Jinping and Donald Trump, saying his firm focuses on fundamental data rather than reacting to every announcement. He expects no breakthrough on geopolitics, though talks on technology, AI and trade could help maintain dialogue, reduce the risk of a fresh escalation and give markets more visibility. Cooperation mechanisms could emerge on risks linked to AI models, but short-term market impact from the summit is unlikely.
The 10-year US Treasury yield has surpassed 5 percent for the first time since 2023, yet equities have shown resilience. Bickel said stock markets historically perform well in early phases of rising rates when they coincide with strong growth. Technology investment remains elevated and US growth is solid, so higher discount rates are being largely offset by expected earnings growth.
"We expect a moderate rate-rise cycle that should be less pronounced than that of 2022," he said. The main risk would be a renewed inflation acceleration forcing even tighter policy, but that is not the base case.
For bonds heading into year-end, Bickel favors short duration and is underweight sovereigns in both Europe and the US. At a 5 percent yield, 10-year Treasuries do not represent an attractive entry point. Instead, he prefers high-quality corporate bonds, the "crossover" segment, certain subordinated financial issues and corporate hybrids.
Credit-market fundamentals remain solid, with strong interest-coverage ratios and improving average index quality, he said.
The healthcare sector has benefited from the recent pullback in technology names, but Bickel sees this as a buffering effect rather than a true rotation. Valuations are attractive, but there is no strong catalyst for sustained outperformance. Patent expirations remain a concern, and firms with limited exposure and the ability to refresh product portfolios are preferred.
Structural aging-population trends favor areas such as obesity, cardiology, oncology and dementia, though not all companies are equally positioned. Healthcare remains interesting in an uncertain environment, particularly for investors seeking to limit AI-related risk, but no structural rotation toward the sector is anticipated.
