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ClariVest Asset Management

AI adopters, US small caps, and international equities

 

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AI adopters, US small caps, and international equities

Artificial intelligence (AI) remains a powerful and expanding global investment theme. Opportunities now extend beyond US mega-cap technology companies to include AI adopters, US small caps, and international markets. While valuation discounts and policy support have created attractive opportunities outside the traditional leaders, today’s geopolitical, energy, and inflation risks make humility, diversification, and disciplined position sizing more important than ever.

AI is booming — and not just in the US

It is full speed ahead for AI investment, as more companies discover the technology’s ever-growing power. We continue to believe there is significant opportunity in taking a global approach to this theme, both domestically and abroad, by capturing both the AI builders and the expanding universe of adopters, while remaining cautious of companies whose business models may be disrupted.

Consider going beyond US large caps

Although US large caps continue to deliver, we believe some of the most underappreciated opportunities can be found in US small caps and international equities as the broadening theme continues. The war has bruised the international story in the near term, with Europe and Japan more exposed to energy disruption, but fiscal and monetary support in Europe, a pro-growth Japanese prime minister, and persistent valuation discounts keep us constructive. US small-cap valuations also continue to appear inexpensive and will likely benefit from the One Big Beautiful Bill Act, given their domestic US exposure.

Humility continues to be crucial

The war, uncertainty around its outcome, and stubbornly high energy prices reinforce the case for humility, just as last April’s tariff selloff did before them. These events serve as reminders to not become overconfident about how the future may unfold. Humility means diversifying and sizing positions appropriately while recognizing the uncertainty that’s present in today’s markets. Surprisingly, this approach may also support stronger outperformance by allowing investors to capture emerging themes through smaller positions before they become more broadly recognized in the marketplace.

Key takeaways

  • Consider taking a global approach to artificial intelligence.

  • The war has weighed on international markets, which nonetheless are poised to benefit from several tailwinds.

  • Stay humble. Recognize the continuing uncertainty in the market. Seek out a diversified set of opportunities. Size portfolio positions appropriately.

 

 

Top of mind: Oil and AI
Percent of MSCI World Index companies
mentioning "oil," "agentic," or "memory" on earning calls

Chart showing Percent of MSCI World Index companies mentioning oil, agentic, or memory on earning calls

Source: Bloomberg, as of 5/26/2026.

Risk Information:

Investing involves risk, including risk of loss.

Diversification does not ensure a profit or guarantee against loss.

Disclosures

There is no assurance that any prediction, projection or forecast on the economy, stock market, bond market or the economic trends of the markets will be realized.

Index or benchmark performance presented in this document does not reflect the deduction of advisory fees, transaction charges, or other expenses, which would reduce performance. Indexes are unmanaged. It is not possible to invest directly in an index. Any investor who attempts to mimic the performance of an index would incur fees and expenses that would reduce return.

This document is a general communication being provided for informational purposes only. It is educational in nature and not designed to be taken as advice or a recommendation for any specific investment product, strategy, plan feature, or other purpose in any jurisdiction, nor is it a commitment from Raymond James Investment Management or any of its affiliates to participate in any of the transactions mentioned herein. Any examples used are generic, hypothetical, and for illustration purposes only. This material does not contain sufficient information to support an investment decision, and you should not rely on it in evaluating the merits of investing in any securities or products. In addition, users should make an independent assessment of the legal, regulatory, tax, credit, and accounting implications and make their own determinations together with their own professionals in those fields. Any forecasts, figures, opinions, or investment techniques and strategies set out are for information purposes only, based on certain assumptions and current market conditions, and are subject to change without prior notice. All information presented herein is considered to be accurate at the time of production, but no warranty of accuracy is given and no liability in respect of any error or omission is accepted. It should be noted that investment involves risks, the value of investments and the income from them may fluctuate in accordance with market conditions and taxation agreements, and investors may not get back the full amount invested. Both past performance and yields are not reliable indicators of current and future results.

The views and opinions expressed are not necessarily those of the broker/dealer or any affiliates. Nothing discussed or suggested should be construed as permission to supersede or circumvent any broker/dealer policies, procedures, rules, and guidelines.

Sector investments are companies engaged in business related to a specific sector. They are subject to fierce competition and their products and services may be subject to rapid obsolescence. There are additional risks associated with investing in an individual sector, including limited diversification.

International investing presents specific risks, such as currency fluctuations, differences in financial accounting standards, and potential political and economic instability. These risks are further accentuated in emerging market countries where risks can also include possible economic dependency on revenues from particular commodities or on international aid or development assistance, currency transfer restrictions, and liquidity risks related to lower trading volumes.

Investing in small-cap stocks generally involves greater risks, and therefore, may not be appropriate for every investor. The prices of small company stocks may be subject to more volatility than those of large company stocks.

Indices

MSCI World Index – Measures large- and mid-cap stock performance across 23 developed markets countries. With 1,310 constituents, the index covers approximately 85% of the free float-adjusted market capitalization in each country. Developed market countries include Australia, Austria, Belgium, Canada, Denmark, Finland, France, Germany, Hong Kong, Ireland, Israel, Italy, Japan, Netherlands, New Zealand, Norway, Portugal, Singapore, Spain, Sweden, Switzerland, the UK, and the US.

About ClariVest Asset Management

ClariVest Asset Management is built around a single core investment philosophy: Clarity in the investment process is critical to maintaining strong performance and client relationships. We believe that success is dependent upon several factors, the most important of which is a disciplined investment strategy with a talented, experienced team of people to execute it.