While many Wall Street heavyweights remain bullish on the persistently hot artificial intelligence (AI) trade, Peter Boockvar, Chief Investment Officer of investment advisory firm OnePoint BFG Wealth Partners, is urging investors to exercise caution and not bet the entire "farm" on this technology in 2026. The firm manages $12 billion in assets.

Boockvar believes that although AI delivered astonishing returns for investors in 2025, the bigger opportunities actually lie outside the AI trade. In fact, many tech industry giants, including NVIDIA, Meta, and Microsoft, have had a "poor start" in 2026.

Boockvar warned in a recently aired program that the sector's previous growth momentum is unsustainable, and the dominance of tech giants is nearing its end. In his view, the AI trade will not be the market's primary driver as investors have become accustomed to in recent years. While growth opportunities still exist, selective caution will become increasingly important.

"Investors should not blindly rely on the AI technology sector as the bellwether and should recognize that many other sectors in the market are also performing well currently," he added.

Boockvar emphasized that market winds are shifting slowly, to the detriment of well-known AI stocks. In his opinion, the market is already showing signs of fatigue, but some investors may be overlooking this. "I believe the dominance of the AI technology sector will wane in 2026," he stated, adding, "A few months ago, we saw the market's reaction to NVIDIA's earnings report. We also saw the market punish Meta for its excessive spending."

Boockvar mentioned that other top AI companies, such as Oracle, are also facing difficulties, with its poor third-quarter performance sparking concerns about AI overspending; he also cited CoreWeave, whose stock surged 90% in 2025 but continues to be dogged by concerns over its high debt and potential lack of profitability.

"I think the entire industry is becoming more fragmented. We've reached a stage where investors realize there will be both winners and losers," he further commented.

Finally, Boockvar reiterated that the surge in capital expenditure in 2025 is part of his bearish outlook for this year, arguing that companies should diversify their spending beyond data centers. "All the capital expenditure growth in 2025 went into data center construction," he said, adding, "Hopefully, in 2026, spurred by tax incentives, other sectors of the economy can pick up the baton."