The development of artificial intelligence (AI) is entering its third phase and will broaden out from well-known companies into technology infrastructure providers creating more scope for returns, which have already surpassed $6 trillion, according to Global X senior investment strategist Billy Leung.
Leung said stock market trades in AI started around 2019 when people realised the importance of semiconductors and the cohort of firms manufacturing them generated up to $2 trillion in value before the second phase started in 2022, when hyperscalers, such as Microsoft, Amazon and Google, used these chips to create large language models creating a further $4 trillion of value.
“The current phase is where we now see a broadening of the AI trade going into infrastructure, which will probably last for another one or two years,” he told smstrusteenews.
“The last seven to eight years have been focused on the leading names, under the banner of the Magnificent Seven or FAANG (Facebook, Apple, Amazon, Netflix and Google) stocks, but there are going to be more players on the infrastructure side adopting and developing agentic AI, which is going to create more beneficiaries as well.
“We’re going to see a broader set of investment opportunities and the investment case will be the same, but the investment scope will be much bigger.”
He said where AI is being used as part of this third wave is in the development of humanoid robotics and cybersecurity.
“Robotics and automation have been around in different ways for 20 years. We know about automation, but the case for them has been made stronger now because of AI,” he added.
“We are already seeing real robotics being installed into manufacturing plants, warehouses, logistic centres, which is only possible because of AI, but is being overlooked by investors because it seems far-fetched.
“Another area that is overlooked is cybersecurity and some people think that AI is going to replace it, which is not the case. A lot of the cybersecurity firms are actually implementing or using AI to make their services stronger.”
To benefit from this ongoing shift, he suggested investors make some alterations to their portfolios and look at both technology firms and those that sit adjacent to their potential growth.
“In terms of your portfolio, your core holdings are fine, but start allocating to where AI money is being invested,” he said.
“If investors have an allocation to commodities, rethink that as well as that space is also being impacted by AI.
“Gold is still fine as a hedge against the US dollar, but also consider non-precious metals like copper and lithium, which are base materials that are also riding the AI wave as well.”
Global X will be presenting a session on closing the technology gap in portfolios at SMSF Trustee Empowerment Day 2026. Please click here to register.