1. AI current and future winners
AI has been the toast of the investment world over the past three years, with companies in the space experiencing rallies backed by earnings expansion. Multiple analysts remain bullish on the theme for the foreseeable future as financial data suggest that valuations are not in bubble territory despite share prices rising to historical highs.
OCBC believes that while AI remains a “mega” investment theme, focus will shift to earnings and the differentiation among participants. Companies with robust earnings, supported by ongoing investment and expanding revenue, are likely to be favoured. At the same time, high valuations are likely to persist, though further multiple expansion may be limited, in OCBC’s view. “It’s very fragmented; the whole AI trend doesn’t benefit every single company,” says OCBC head of equity research Carmen Lee at a media briefing.
In its report, OCBC highlighted several companies from Northeast Asia which have seen strong gains from the AI boom. These include Kioxia Holdings Corp, Tokyo Electron and Murata Manufacturing from Japan; SK Hynix and Samsung Electronics from Korea; and Taiwan Semiconductor Manufacturing Co from Taiwan.
See also: OCBC keeps Singapore overweight for 2H2026 on steady yield and quality
Coincidentally, asset manager Amundi is overweight and “constructive” on Korea, Taiwan, and Japan, as these markets are part of the AI value chain. Korea produces memory; Taiwan manufactures “leading-edge” chips. At the same time, Japan provides the equipment and raw materials used to make those chips, according to Claire Huang, Amundi Investment Institute’s senior emerging-market macro strategist.
“We will look for opportunities and try to add [to our position] if there’s any correction,” Huang tells The Edge Singapore on the sidelines of the Amundi World Investment Forum. She adds that Amundi is monitoring concentration risk despite confidence in the AI space.
Echoing positive sentiment for the AI theme is DBS, whose chief investment office forecasts a capex “supercycle”. “We remain all-in on AI-related exposure, while recognising the market has become increasingly concentrated, with the top 10 AI stocks generating c.78% of index gains,” states DBS chief investment officer Hou Wey Fook in DBS’s CIO Insights 3Q26 publication.
See also: No rate changes for foreseeable future: Citi
On identifying where potential AI investment opportunities lie, Hou posits that AI deployment can be divided into five stacks — energy, chips, infrastructure, models, and applications. “For example, the chips and infrastructure layers involve data centres to enable AI training and inference at scale,” he explains at a media briefing. He adds that hyperscalers are investing hundreds of billions of dollars into data centres and semiconductor companies are the biggest beneficiaries now.
Beyond the current beneficiaries, analysts are also sifting through data to predict future AI winners. According to Maybank Securities head of research Thilan Wickramasinghe, telcos could be among the next batch of businesses that would benefit as AI moves from text-based prompting to physical AI.
Wickramasinghe explains that physical AI, such as robots and autonomous vehicles, requires low-latency connectivity. “[This] means that boring old telcos, who everyone thought were a commodity, will actually become more and more important, [because] they have the infrastructure to provide that low-latency connectivity”, he tells The Edge Singapore. Singapore Telecommunications, the industry leader, is a stock favoured by CGS International (CGSI), Maybank and OCBC.
Similarly, JP Morgan Asset Management global market strategist Raisah Rasid believes that robotics and autonomous vehicles are future AI champions. “The winners of today may not be the winners of tomorrow,” she says. “We are telling investors that we have to position your portfolio for that next wave of AI, because again, like it or not, AI is a story that is going to be here to stay for a long time.”
2. Renewables grab power
The combination of power-guzzling AI and energy security concerns will drive investment in energy infrastructure, believe analysts.
Europe’s acceleration toward alternative power generation began with Russia’s invasion of Ukraine in 2022, as the cutoff of Russian gas underscored energy security concerns. Around four years later, with the US-Israel attack on Iran and the closure of the Strait of Hormuz, energy security is on everyone’s lips.
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To DBS’s Hou, energy is the “choke point” for the full deployment of AI. “There is just insufficient electricity to power AI, and there is also an acute need to upgrade ageing grid systems and infrastructure,” he says.
DBS sees renewed investment across the energy value chain amid rising energy security concerns after years of underfunding. According to the IEA, global energy investment will hit US$3.4 trillion ($4.4 trillion) this year, with around US$2.2 trillion expected to be channelled into grids, storage, low-emission fuels, nuclear, renewables, efficiency, and electrification. In comparison, around US$1.2 trillion goes into fossil fuels.
With the spike in oil prices, the energy transition — clean energy in particular — has swiftly moved into focus, notes Julius Baer, which identifies solar, wind, and battery storage as the technology combination that is upending power markets globally.
“Although a direct and pronounced impact is missing, the energy shock has lifted investor appetite in the clean energy theme and is supporting ongoing capital flows into these technologies, especially in natural-gas-import-dependent emerging markets,” notes the Swiss private bank in its mid-year market outlook. “With evermore storage capacity on the grid, which reduces curtailments and lifts prices during periods of solar or wind abundance, the business conditions for clean energy power producers are brightening.”
Maybank’s Wickramasinghe is similarly bullish on renewables and utilities benefitting from power demand. He identifies names such as Solarvest from Malaysia, ACEN Corporation from the Philippines and Indonesia’s PT Pertamina Geothermal Energy in the renewable energy space while citing Singapore’s Sembcorp Industries for the utilities sector.
3. Singapore — anchor in a sea of instability
Who invests in stability? The data suggests that investors are attracted to stability.
According to Maybank, the financial sector is benefitting from safe-haven inflows as investors transfer their funds from Middle East financial hubs such as Dubai. Foreign currency deposits grew 7.2% y-o-y in May, representing an increase of $40.4 billion from pre-war levels in February. During the same period, Singdollar deposits rose by 6.4%, remaining $25 billion above February. Gold imports from the UAE surged to a record 1,446kg in March.
Speaking to The Edge Singapore, Maybank’s Wickramasinghe links the Singapore market to the country’s stability. He says that previously, in a world of stability provided by US hegemony, Singapore’s stability was neither scarce nor highly valued.
However, with conflict either intensifying or emerging in new places, Singapore’s stability has become scarce. “In a world where it was unipolar, rules-based, where you know supply chains were devised to be perfect, you actually didn’t need a place like Singapore,” says Wickramasinghe. He adds that other markets were more attractive because the cost of equity would be lower, and, as such, risk premium discovery for the Singapore markets was not very accurate.
As the world becomes more Vuca, the cost of equity in traditional growth markets is lost. Singapore, with policy certainty, fiscal certainty and strong fiscal firepower, is very rare in such an environment, says Wickramasinghe. “Stability is something the world is actually paying a premium for, and the market is pricing that,” he elaborates on Singapore’s strong equity market performance.
In its Singapore strategy report for 2H2026, Maybank remains bullish for the market even though it cut its target to 5,500 from 5,600 due to higher energy costs. Together with accelerating large-cap returns and value unlocking for small- and medium-cap counters, market risks are on the upside in 2H2026.
Maybank suggests that broadening liquidity, faster deployment of the Equity Market Development Programme (EQDP) funds, and accelerating AI adoption will set the stage for further re-rating.
Among the counters Maybank is bullish on include AI-related plays AEM Holdings, CSE Global and Frencken Group. CGSI shares the sentiment on the three counters.
For OCBC, favourite picks include Bumitama Agri, CapitaLand Integrated Commercial Trust, CapitaLand Ascendas REIT, Keppel DC REIT, Netlink NBN Trust and UOL. These counters also received a positive rating from CGSI.
Among the picks for local banks, Maybank likes OCBC, while CGSI is positive on both OCBC and DBS.
