Barclays optimistic about U.S. stocks: Energy shocks face AI-driven profit growth

LootboxPhobia · 2026-03-26T17:36:54+00:00

Barclays believes that despite global market fluctuations caused by the US-Iran conflict, investors should focus on U.S. stocks, expecting AI-driven profit growth and support from the economic cycle. U.S. corporate earnings are projected to grow by 15% by 2026, with an emphasis on the relative valuation advantage and monetary policy flexibility in the United States.

LootboxPhobia

2026-03-26 17:36:54

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Investing.com - Barclays states that investors should “fear headlines but believe in the cycle,” as the bank believes the unusual combination of energy shocks and AI-driven profit booms supports continued overweighting of U.S. stocks.

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Analyst Ajay Rajadhyaksha said in a client report that global markets are struggling this quarter due to the sharp rise in energy prices triggered by the US-Iran conflict, impacting both stocks and bonds, but he noted that “the worst-case scenario will not happen.”

Barclays emphasizes that although the S&P 500 has fallen about 3% so far this year, the bank believes the expanding scope of AI applications and structural benefits from the growth of investment cycles in Western economies remain intact.

The bank expects U.S. corporate earnings to grow about 15% by 2026, calling the earnings backdrop a “key differentiator compared to Europe.”

Barclays adds that U.S. valuations have already adjusted, noting that the forward P/E ratios of large tech stocks have fallen to their lowest levels since early 2025, despite improved earnings expectations.

This “valuation correction,” combined with earnings growth, indicates that market performance is “more than just a story about the ‘Big Seven’ tech giants.”

Monetary policy is another supporting factor. Barclays states that, compared to the European Central Bank, the Federal Reserve has more room to ignore energy-driven inflation impacts, while markets still expect the ECB to tighten policy further.

The bank believes this policy asymmetry “strengthens the gap between U.S. and European stock markets.”

Barclays notes that the U.S. continues to offer the purest combination: solid earnings growth, AI-driven capital expenditure, profit margin support, and policy flexibility. The bank concludes that investors should “favor structural winners while hedging against near-term macro and policy risks.”

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