UBS expert says AI rally lacks cautionary voices, eyes consumer stocks

UBS managing director and senior portfolio manager Jason Katz discusses whether the biggest gains from the AI boom are already behind investors and opportunities in consumer stocks on ‘Varney & Co.’

A finance expert is urging investors to look beyond the artificial intelligence trade after a massive rally in technology stocks, arguing that future market gains may come from other areas of the economy.

UBS Managing Director and Senior Portfolio Manager Jason Katz joined FOX Business’ “Varney & Co.” host Stuart Varney to discuss market leadership, the outlook for consumers and where investors may find opportunities if enthusiasm around AI begins to cool.

The New York Stock Exchange (NYSE) in New York, New York. (Michael Nagle/Bloomberg / Getty Images)

Artificial intelligence has driven much of the stock market’s gains over the past several years as companies race to build data centers, expand computing capacity and develop new AI-powered products. The surge has helped lift major technology stocks and fuel broader optimism on Wall Street.

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But Katz suggested investors may need to adjust expectations after the sector’s rapid run-up.

“AI has taken all the air out of the room, and with good reason,” Katz said. “But this rally is astounding. There isn’t a single cautionary tone or voice out there.”

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While Katz said he is not predicting a major downturn, he noted that investors may be waiting for the next catalyst as markets assess factors, including energy prices and corporate earnings.

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Katz pointed to consumer discretionary stocks as a potential area to watch, noting they have significantly lagged the broader market this year despite the importance of consumer spending to the U.S. economy.

The discussion comes as Americans continue to closely monitor fuel costs and other household expenses. Katz argued that lower oil prices could provide meaningful relief for consumers.

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“For every dollar that that consumer is not spending at the pump, she’s spending at shopping… Hopefully, we see the consumer step up to the plate, and we believe that will be the case.” Katz said.

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