Video: Invest in transformational innovation: AI, power and resources, & longevity
Artificial intelligence
Our investment framework divides the artificial intelligence (AI) ecosystem into three distinct layers: enabling, intelligence, and application.
The enabling layer comprises the core infrastructure and foundational technologies that power AI, including semiconductors, cloud computing, networking equipment, and specialized hardware. We continue to see robust demand for advanced chips and high-performance computing, though higher-than-expected capital expenditure and rising competition have increased uncertainty and made selectivity more important.
The intelligence layer covers the software, algorithms, and data platforms that enable AI systems to learn, reason, and generate insights. This includes AI model developers, data management firms, and providers of machine-learning tools. Monetizing innovation remains a challenge for pure-play AI software firms, and the line separating them from the application layer is increasingly blurring as frontier model companies seek to capture new revenues. That's sparked listed-software sector volatility, but also hinted at a path toward AI model monetization for the most adaptable firms.
The application layer consists of end-user products and services that leverage AI to deliver value. We expect the broadest impact and fastest growth here over the next three years, as AI shifts from experimentation to deployment and as consumer adoption rises. We continue to monitor companies that can demonstrate clear productivity gains, cost savings, or new revenue streams from their tools.
However, the pace and sustainability of monetization may be uneven and dispersed, with agentic AI tools accelerating automation risk, particularly for software and services. Application layer competitors with strong competitive moats, regulatory barriers, or entrenched B2B relationships are better positioned to adapt AI to their business, rather than be displaced by it, in our view.
We continue to see opportunity in AI-linked stocks, but the operating environment is more nuanced. We recommend a diversified and active approach across the enabling, intelligence, and application layers, and suggest investors review concentrated exposures—particularly in single-name AI stocks or sectors where competition is intensifying. Stepping back, if AI models do replace costly intermediaries, this may unlock new revenue streams to justify heavy capex while also potentially offering businesses and consumers alike the benefits of greater efficiency and lower costs.
Power and resources
The order pipeline for power and resources remains robust. Rapid AI adoption is driving US electricity demand higher, with data centers projected to add as much power demand as Sweden currently consumes per year by 2030. The EIA estimates data centers could account for up to 9% of total US electricity use by 2035 (compared to around 4% today) and wholesale power prices were 23% higher on average in 2025 than in 2024. However, data center demand is just one of many drivers of increased investment in power and grid infrastructure. We also see encouraging trends in grid resilience and transmission infrastructure, power generation and renewables, building electrification, industrial automation, critical minerals, and other relevant categories. Most products supplied by the value chain are fungible and can be used in a wide range of applications.
Policy support for clean energy remains robust in the EU and China. In the US, selected provisions of the Inflation Reduction Act remain, but the Bipartisan Infrastructure Law and the One Big Beautiful Bill Act have superseded many elements, making policy support more mixed. Our conviction in the breadth and duration of the power and resources investment opportunity remains unchanged by jitters in the AI complex. We recently upgraded US industrials to Attractive, and we expect companies at the core of our thesis to continue benefiting from robust demand, with their exposure to physical assets insulating them from market concerns about potential AI-related disruptions.
The power and resources sector is attracting strategic investor focus as higher demand drives new capital investment across the electricity value chain. Global grid investment likely reached around USD 500bn in 2026. We see the best investment prospects at present in the electrification value chain, which is supported by growth in electricity demand, data center capex, and vital investment in aging power grids. We forecast around USD 3tr in combined annual investment by the end of the decade in power generation, energy storage, grid infrastructure, data centers, and transportation and industry.
Over the long term, demand for new technologies such as AI-driven grid management and modular nuclear reactors is expected to rise, though small modular reactors are unlikely to be a material revenue driver before the mid-2030s.
Meanwhile, a tightening supply of raw materials is both a challenge and an opportunity. For example, we expect copper demand to rise by close to 3%, likely pushing prices above USD 13,000/mt in 2026 as the market deficit expands to 87,000 metric tons (from 53,000 metric tons in 2025).
Our preferred investment approach emphasizes regional and sectoral diversification as the power and resources value chain evolves. While our theme was initially concentrated on data-center-linked electrical equipment, we have broadened it to include companies supporting grid modernization and supplying critical raw minerals.
Longevity
As technology and infrastructure reshape the way we live and work, we believe another powerful force is emerging at the intersection of demographics and innovation: the longevity opportunity that helps people live longer, healthier lives.
By 2030, we estimate that annual revenues in the global longevity market could reach USD 8tr, up from USD 5.3tr in 2023, with health care alone representing a USD 2.2tr opportunity. We see particularly strong potential growth in the obesity, oncology, and medical device markets.
For global obesity drugs (GLP-1s), we expect producers to grow revenues at around 12% CAGR through 2030, driven by rapid adoption given clinical benefits (with delivered 15-22% weight loss in trials and reduced cardiovascular/kidney risks) and expanding insurance coverage.
The anticipated launch of oral GLP-1 drugs in 2026 is set to broaden patient access and accelerate market growth, making obesity management a central pillar of the longevity opportunity.
We expect oncology pharma to grow at an 8% CAGR by 2030. Aging demographics and earlier diagnoses should underpin robust demand. Next year will also see potentially pivotal clinical readouts in certain types of antibody treatments, antibody-drug conjugates (ADCs), and oral SERDs (Selective Estrogen Receptor Degraders, a class of drugs used to treat breast cancer).
We also anticipate medical devices, especially diabetes and surgical devices, will grow revenues at mid- to high-single-digit rates. Advances in continuous glucose monitoring (CGM) and minimally invasive surgery should support strong demand.
We favor a diversified approach across sectors poised to benefit from demographic shifts. Health care stands out as a primary driver of longevity, given its essential role in serving an ageing population. But we expect the opportunity set to evolve over time, with other sectors gaining prominence as the longevity trend matures. Other segments—such as consumer markets, financial services, and real estate—also present opportunities, though some are still adapting their business models to address the needs of this expanding demographic.
