A team led by Michael Hartnett, a strategist at Bank of America known as the “most accurate strategist on Wall Street,” released a research report stating that even if the Middle East conflict temporarily ends, the upward trend in global commodity markets will persist until the end of 2030. The BofA strategist team emphasizes that commodities represent a structural trading theme, while Chinese tech stocks and the global semiconductor sector are tactical core offensive directions. Global consumer stocks are expected to fully benefit from the “policy panic rescue package” that the U.S. government may introduce to avoid an economic recession.
In Hartnett’s view, commodities are the most logical and highest-level core post-war trading theme. Investors urgently need to hedge against risk, inflation, and a weakening U.S. dollar, while geopolitical factors and the global AI race are inherently intensifying the competition for energy, rare earths, minerals, and key resources.
BofA strategists are aggressively betting on the latest framework of “risk assets continuing to rise strongly underpinned by policy support, and a new round of inflation along with geopolitical restructuring identifying winners in resources and the high-end manufacturing chain.” U.S. stocks remain difficult to systematically short, not because their fundamentals are flawless, but because the stock market is viewed by policymakers such as the Treasury and the Federal Reserve as “too big to fail.” Only in the event of a genuine policy failure, such as a collapse of the U.S. dollar or U.S. Treasury bonds, would short sellers regain the upper hand.
A steepening long-term Treasury yield curve, the consumer sector, the semiconductor sector, and Chinese tech stocks are, in BofA’s view, core trading themes second only to commodities. BofA strategists further lean towards international stocks and small-cap stocks, rather than focusing long-term on large-cap U.S. tech stocks as the mainstream market does. They are betting on a shift of funds from the old order of “U.S. large-cap tech + Treasury bonds” to a new order of resource concentration, internationalization, the manufacturing chain, and policy-benefiting assets.
In the view of Hartnett’s team, semiconductors, consumer stocks, and Chinese tech stocks represent more actionable tactical offensive themes. Chinese tech stocks correspond to the continued leadership of “Made in China” and a sustained easing of U.S.-China trade tensions; semiconductors correspond to the continued capital expenditure arms race among AI hyperscale cloud computing giants; consumer stocks benefit from expectations that fiscal and monetary policies will shift more towards alleviating living cost pressures. BofA predicts that by 2030, the total global semiconductor market will reach $2 trillion, with a compound annual growth rate of 20%. Amazon, Google, Meta, Oracle, and Microsoft are expected to accumulate approximately $650 billion to $700 billion in AI-related capital expenditures by 2026, with total investments from 2023 to 2026 reaching about $1.5 trillion, far exceeding the sum of all previous historical spending.
