In a remarkably short time, artificial intelligence (AI) has become mainstream. Once the preserve of tech enthusiasts and science fiction fans, it is now everywhere: in our smartphones, at work, in healthcare—and in our investment portfolios. Many investors are excited, yet they struggle with one key question: what does AI’s meteoric rise really mean? Is it a bubble waiting to burst, or are we only at the beginning of a lasting revolution?
"}},{"componentType":"sectionTitle","title":"From Science Fiction to Everyday Reality"},{"componentType":"paragraph","richBody":{"value":"The speed of change is astonishing. Just three years ago, AI was little more than a buzzword. Today, it is a practical technology powering smart assistants, instant translations and facial recognition. AI inspires enthusiasm—but also concern. Some investors fear a repeat of the dot-com bubble of the early 2000s, when tech stocks soared to unprecedented heights before crashing. That fear is understandable, but there are important differences today. And it pays to take a broad view of AI.
"}},{"componentType":"sectionTitle","title":"Why AI Is Growing So Fast"},{"componentType":"paragraph","richBody":{"value":"AI’s explosive growth has been enabled by increasingly powerful microprocessors—the chips inside our computers and phones. Over decades, these chips have become faster and more efficient, allowing computers to perform tasks once thought impossible: recognising images, holding conversations and analysing vast amounts of data. AI now acts as a bridge between technology and the economy. It can boost productivity, attract investment and even help offset labour shortages with smart robotics.
"}},{"componentType":"sectionTitle","title":"ChatGPT: A Turning Point"},{"componentType":"paragraph","richBody":{"value":"A striking example of rapid adoption is ChatGPT, launched in November 2022. Within two months, it had 100 million users; today, nearly a billion. Businesses are embracing AI too: between 30% and 70% now use AI applications. According to the Federal Reserve Bank of St. Louis, AI adoption is twice as fast as the internet’s. Where the internet took ten years to reach 40% of the population, AI achieved that in just three.
"}},{"componentType":"sectionTitle","title":"AI Promises a Productivity Boom"},{"componentType":"paragraph","richBody":{"value":"One of AI’s greatest promises is a surge in productivity—doing more in less time. Historically, the impact of new technologies on productivity was slow to materialise. But AI’s rapid adoption could trigger a “productivity shock”. Some studies predict annual economic growth of around 3%, comparable to the post-war boom and the 1960s.
AI can also help address labour shortages in ageing economies. Smart robots and AI agents can take over tasks, while advanced models now perform work once reserved for highly skilled professionals—such as coding or solving complex scientific problems.
"}},{"componentType":"sectionTitle","title":"Companies Are Investing Billions"},{"componentType":"paragraph","richBody":{"value":"Investment in AI is soaring. Tech giants like Microsoft, Alphabet (Google), Amazon, Meta and Oracle—the “hyperscalers”—are investing nearly $350 billion annually in AI. Nvidia CEO Jensen Huang predicts this could rise to $3–4 trillion over the next five years. In the US, spending on data centres now rivals investment in office buildings. AI has become a major engine of economic growth, especially in America.
"},"alignedImage":{"position":"bottom","transformBaseUrl":"https://assets.ing.com/transform/2654c73d-433e-4438-a497-57920218a181/Beleggingsvisie-2026-Capital-expenditures-and-cashflow-hyperscalers","original":"https://assets.ing.com/m/acf7cff8f71387a/original/Beleggingsvisie-2026-Capital-expenditures-and-cashflow-hyperscalers.svg","extension":"svg"}},{"componentType":"sectionTitle","title":"Is This an AI Bubble?"},{"componentType":"paragraph","richBody":{"value":"With such huge sums and surging AI stock prices, fears of a bubble are natural. There are similarities to the dot-com era: AI stocks have risen nearly 160% since late 2022, and the “Magnificent Seven” (Microsoft, Apple, Nvidia, Amazon, Alphabet, Meta and Tesla) now account for 36% of the S&P 500—compared to 19% for the top seven internet firms in 2000.
But there are crucial differences. Today’s valuations, while high, average 26 times expected earnings—half the 52 times seen in 2000. These companies are also far more profitable, with margins around 30% and returns on equity near 46%, almost double two decades ago. Investments are funded largely from cash flow, not debt—making this cycle far healthier.
"}},{"componentType":"sectionTitle","title":"Diversification Is Key"},{"componentType":"paragraph","richBody":{"value":"Despite AI’s potential, it is important not to put all your eggs in one basket. Tech is heavily concentrated in the US, but opportunities exist elsewhere. South Korea and Taiwan offer compelling tech stocks, and Chinese IT firms remain innovative, resource-rich and attractively valued. Tech accounts for less than 10% of China’s MSCI index versus 40% in the US, and trades at a P/E of 25 versus 30 in the US.
Healthcare is another sector where AI is transformative. It is relatively cheap and a leader in AI adoption. Big pharma has invested heavily since 2018. A breakthrough came with AlphaFold, DeepMind’s AI tool for predicting protein structures. During the pandemic, AI accelerated vaccine development. In ten years, FDA-approved AI applications in healthcare have jumped from two or three annually to over 200.
"}},{"componentType":"sectionTitle","title":"Opportunities Beyond Public Markets"},{"componentType":"paragraph","richBody":{"value":"The best AI opportunities are not always listed. The number of public companies has fallen from 7,300 in 1996 to 4,300 today. Tech firms now wait 12 years—or never—before going public, compared to four years in 1999. Tech’s share of IPOs dropped from 70% in 2017 to 30% in 2021. Private equity offers a way to access these early-stage innovators.
"}},{"componentType":"sectionTitle","title":"Embrace AI—But Wisely"},{"componentType":"paragraph","richBody":{"value":"AI is more than a hype—it is a revolution reshaping economies, work and daily life. But invest smartly: diversify across regions, sectors and asset classes. Avoid overconcentration in US tech. Include sectors like healthcare and strategies such as private equity.
The ING Investment Office remains positive on the broad IT theme, but with a diversified approach: active stock selection, regional spread (including China and emerging markets) and sector diversification. Those who want to benefit should look broadly—not bet on one sector or region.
Would you like to know more about the opportunities the Investment Office has identified for 2026? Please read this article.
"}},{"componentType":"linkList","iconTitle":{"title":"Read more"},"textLinks":[{"url":"/en/personal/investing/market-news-and-views/investment-outlook-2026-home","text":"Investment Outlook 2026: Homepage"},{"url":"/en/personal/investing/market-news-and-views/investment-outlook-2026-equities","text":"Investment Outlook 2026: Equities"},{"url":"/en/personal/investing/market-news-and-views/investment-outlook-2026-risks","text":"Investment Outlook 2026: Risks"},{"url":"https://assets.ing.com/m/7dfc82cb56e72468/original/Investment-Outlook-2026.pdf","text":"Investment Outlook 2026: Download PDF"}]},{"componentType":"sectionTitle","title":"Good to know"},{"componentType":"paragraph","richBody":{"value":"Investing involves risks and costs. The value of your investment may fluctuate. Past performance is no guarantee of future results. Read more about the risks of investing .
This publication has been prepared on behalf of ING Bank N.V. and is intended for information purposes only. ING Bank N.V. obtains its information from sources deemed reliable and has taken the utmost care to ensure that the information on which it based its views in this publication was not incorrect or misleading at the time of publication. ING Bank N.V. does not guarantee that the information it uses is accurate or complete. The information contained in this publication may be changed without any form of announcement. Copyright and data file protection rights apply to this publication. Data from this publication may be reproduced provided that the source is stated. ING Bank N.V. has its registered office in Amsterdam, commercial register no. 33031431, and is regulated by the Dutch central bank De Nederlandsche Bank (DNB) and the Netherlands Authority for the Financial Markets (AFM). ING Bank N.V. is part of ING Groep N.V.
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