August 10, 2026
During a recent market discussion, Michael Landsberg, Chief Investment Officer at Landsberg Bennett Private Wealth Management, highlighted a growing example of this problem: artificial intelligence exposure appearing across technology, industrials, utilities, real estate, energy, and other areas of the market.
An investor may believe those holdings represent different sectors, but if each depends heavily on AI infrastructure spending, their underlying risk may be far more similar than the labels suggest.
As Michael explained:
“You can’t have every single stock and every single sector be an AI-adjacent theme.”
That distinction has become increasingly important as AI spending reaches further into the economy.
Michael’s positive market outlook continues to begin with earnings rather than market momentum.
He pointed to a seventh consecutive quarter of double-digit earnings growth, with the latest quarter producing particularly strong results. He also noted that participation has expanded beyond the small group of technology stocks that previously accounted for a significant share of market gains.
“This is an earnings-based rally.”
For Michael, that creates a healthier backdrop than a market driven primarily by speculation, changes in monetary policy, or enthusiasm around a narrow collection of investments.
He believes the second half of the year could remain constructive provided earnings continue to hold up and there is no unexpected geopolitical or Federal Reserve shock.
Traditional diversification often begins by dividing a portfolio among sectors.
Michael believes investors now need to go one level deeper.
An industrial business supplying data centers may technically sit in the industrial sector, but its earnings may depend heavily on the AI buildout. A utility benefiting from data-center electricity demand may carry similar exposure. The same can apply to certain real estate and energy investments.
“If you have industrials that are AI related, that’s not an industrial. It’s an AI stock.”
The broader lesson is that sector labels alone may no longer tell investors how diversified they actually are.
Michael refers to the need for what could be described as theme diversification, looking at the economic forces driving each holding rather than relying only on its formal sector classification.
International investing presents a similar challenge.
Michael noted that many U.S. investors maintain relatively limited overseas exposure. Yet simply increasing an international allocation does not necessarily solve the diversification problem.
Several widely held international technology names remain closely connected to the same semiconductor and AI trends influencing U.S. markets.
Michael therefore believes investors should examine countries and businesses whose growth is being driven by different economic factors.
He cited markets such as Poland, Belgium, and New Zealand as examples of areas that may provide exposure outside the global technology trade.
The objective is not international investing for its own sake. It is finding earnings growth that behaves differently from what investors already own.
Michael also challenged investors to separate previous performance from future opportunity.
Landsberg Bennett screened businesses within a global equity index based on projected earnings growth over the next five years. Michael said a significant portion of those faster-growing names came from international markets, emerging markets, and smaller or medium-sized U.S. businesses.
That creates a different question for portfolio construction:
Are investors positioned around where earnings have already grown, or where earnings may grow next?
Technology can remain part of the answer. Michael continues to see meaningful opportunities within AI, semiconductors, memory, and cybersecurity.
But he does not believe success in those areas requires allowing them to dominate a portfolio.
Michael repeatedly returned to one idea throughout the discussion: position size matters.
A successful investment can grow into an increasingly large share of a portfolio. That does not automatically make it a poor investment, but it can change the amount of risk the portfolio is taking.
“You can own some of those names, but the dosage has to be the right amount.”
This becomes particularly relevant for retirees and investors approaching retirement, where exposure to highly volatile technology investments may need to be considerably lower than their weighting in a broad market index.
Rather than abandoning successful holdings, Michael favors rebalancing them as necessary while allocating capital toward other sources of potential earnings growth.
Michael also distinguished between finding value and simply buying something because its price has fallen.
He does not believe every lagging investment represents an opportunity. Sometimes an investment has fallen because its underlying business is deteriorating.
His preference is to identify businesses he already wants to own and wait for temporary price weakness.
“I want to buy when there’s a temporary dislocation in the stock price.”
That can mean maintaining a list of potential purchases and gradually adding during periods of volatility rather than reacting emotionally when markets move.
Michael described approximately a 10% decline in an individual holding as one level that may warrant closer attention, depending on the investment and its fundamentals.
The emphasis remains on preparation rather than prediction.
Michael’s outlook is constructive because earnings remain strong and market participation has expanded. But his comments also point to a portfolio challenge that may become increasingly important as AI reaches further into the economy.
Owning technology, industrials, utilities, real estate, and international investments does not automatically create meaningful diversification if all of them ultimately depend on the same theme.
The more useful question may be:
What would cause each investment in the portfolio to succeed or struggle?
If too many holdings share the same answer, the portfolio may be more concentrated than it appears.
We believe diversification should be evaluated by the underlying sources of earnings and risk rather than sector names alone.
Artificial intelligence can remain an important part of a portfolio, but its growing influence across industries means investors should understand where AI exposure may be appearing indirectly. A portfolio containing several sectors can still behave like one concentrated trade if the same economic theme drives many of its holdings.
We continue to focus on earnings growth, appropriate position sizing, international exposure, and investments driven by different economic forces. Rebalancing can also help prevent strong-performing positions from gradually creating more portfolio risk than originally intended.
The objective is not to move away from areas that continue to grow. It is to participate in that growth without allowing one theme to determine too much of the portfolio’s outcome.
Landsberg Bennett is a group comprised of investment professionals registered with Hightower Advisors, LLC, an SEC registered investment adviser. Some investment professionals may also be registered with Hightower Securities, LLC (member FINRA and SIPC). Advisory services are offered through Hightower Advisors, LLC. Securities are offered through Hightower Securities, LLC.
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