Equity Market Commentary - June 2026

AI is not in a bubble in the same way the internet was not in a bubble, even if some stocks tied to it can still become overheated. The strongest AI beneficiaries are seeing real demand, rising revenue and earnings estimates, and valuations that are often more reasonable than those seen at the peak of dot-com excess.

The bigger risk is not that AI disappears, but that investor expectations outrun fundamentals or that momentum buyers crowd into the same names too aggressively. That can create sharp corrections, especially if Federal Reserve policy turns less supportive or spending growth slows.

For investors, the opportunity remains in companies with durable exposure to AI buildout and tangible cash flow benefits. At the same time, portfolios may be better protected by pairing those holdings with businesses that are less correlated to the AI trade and have solid fundamentals of their own.