Bank of America Warns AI Rally May Stall; Recommends Defensive Stocks as Rotation Hedge

According to Bank of America's European equity strategy head Sebastian Raedler on Bloomberg Television, should the current artificial intelligence-driven market rally show signs of weakness, investors should shift focus to defensive sectors including consumer staples and pharmaceuticals. Raedler questioned whether AI can ultimately develop into a high-margin business model that justifies recent large-scale capital expenditure by tech giants, noting that final profitability hinges on whether customers will pay premium prices for AI services or turn to lower-cost open-source alternatives instead.
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