AI adoption, energy independence and resilient earnings growth are set to sustain investor optimism into the final quarter of 2026, with the opportunity set widening beyond US mega-cap companies to more sectors and regions, according to HSBC Private Bank.

In its investment outlook for the fourth quarter of 2026, HSBC Private Bank said the global economy and corporate earnings have remained more resilient than many expected, despite market stress from geopolitical conflicts, oil price volatility and concerns about inflation and interest rates.

The private banking arm of HSBC thinks that stronger earnings, active commercial and workforce adaptations and ongoing investment in innovation and infrastructure are helping economies offset these risks.

HSBC outlined four investment priorities for the last quarter of 2026, noting how AI adoption and investment are continuing to accelerate. The bank prefers areas where returns are visible and sustainable, particularly across cloud, semiconductors and AI-enabled applications. It also emphasised benefits from governments’ focus on security and energy independence. Geopolitical tensions, supply chain interruptions and surging electricity demand are driving investment in cybersecurity, defence, energy supply, critical materials and climate mitigation sectors, it said. 

Another priority, the bank said, is to build portfolio resilience with income and multi-asset strategies. Income from quality bonds, infrastructure and dividends can help stabilise returns, while hedge funds, private markets and gold can increase diversification and help temper volatility.

Finally, the bank highlighted the benefits of tapping into Asia’s innovation and income. Semiconductor, robotics and advanced manufacturing firms in Asia are clear beneficiaries of the global AI supply chain and local innovation, while companies with strong shareholder returns and high-quality credit add income to help balance exposure.

“Investors are navigating multiple sources of uncertainty, but broadening earnings momentum and resilient economic activity continue to support a risk-on environment,” Willem Sels, global chief investment officer, HSBC Private Bank and Premier Wealth, said. “As AI progresses from novelty towards monetisation, we’re deploying multi-asset portfolio strategies to capture opportunities from structural growth trends, while adding bonds and alternative assets to help cushion ongoing volatility.”

The bank holds a constructive yet selective multi-asset stance, with a preference for global equities, quality bonds and alternative investments. It maintains its overweight position in global equities, favouring the US, Japan, mainland China, Hong Kong, Singapore and South Korea, complemented by exposure beyond technology.

As AI monetisation improves, the bank sees the gains spreading to financials, industrials, materials and energy. While Asian markets stand to benefit from global chip demand, a broader range of markets may also see productivity gains from wider AI adoption, the bank said.

Fixed income
The private bank also sees opportunities in fixed income, where elevated real yields and quality income can help stabilise portfolios. In currencies and commodities, the US dollar is expected to stay broadly supported, and the private bank retains a bullish long-term view on gold.

“Asia remains central to the accelerating AI development and the global supply chain,” Desmond Kuang, chief investment officer, Asia, HSBC Private Bank and Premier Wealth, said. “We tap into beneficiaries across the region’s AI ecosystem and advanced manufacturing leaders, complemented by companies with strong shareholder returns and high-quality credit. This combination creates a compelling mix of innovation, diversification and income opportunities.”

Similarly, a number of wealth managers, such as St James Place, Aberdeen Investments, Franklin Templeton and Scottish-based investment manager Baillie Gifford are constructive on tech and AI-driven emerging markets, 70 per cent of which can be found in Asia. See more here and here.