BofA's Raedler Urges Shift to Defensives if AI Trade's High-Capex Bet Falters

1 articles · Updated · Bloomberg · Jun 25

Sebastian Raedler, Bank of America’s head of European equity strategy, said investors should rotate into defensive sectors if the AI trade starts to unravel.
Raedler questioned whether AI will ever become a high-margin business capable of justifying the heavy capital spending behind the rally.
Consumer staples and pharma are among the “left-behind” sectors he highlighted, arguing their underlying business models still work well as downside protection.
The call frames defensives as a hedge against a reversal in one of the market’s dominant themes rather than a broad retreat from equities.