For years, investors have poured money into artificial intelligence and the technology companies powering the boom. But one veteran Wall Street strategist believes the next wave of winners could come from far less glamorous sectors.

Robert Almeida, Chief Global Investment Strategist at MFS Investment Management, argues that investors are paying too much attention to the Federal Reserve and not enough attention to what ultimately drives stock prices: a company’s ability to generate strong returns on invested capital.

His view is leading him to reduce exposure to some of the market’s hottest AI hardware names while increasing positions in industrials, software, healthcare, and even alcoholic beverage companies.

Forget the Fed. Focus on Profits.

With markets closely watching the Federal Reserve’s latest interest-rate decision, Almeida believes investors are asking the wrong question.

Rather than obsessing over whether rates move higher or lower, he says investors should focus on whether companies will be earning more money 6, 12, or 18 months from now.

According to Almeida, the investment landscape has undergone a massive shift.

Instead of companies using cheap money primarily for stock buybacks and financial engineering, businesses are now investing enormous amounts of capital into artificial intelligence infrastructure.

That spending boom has fueled impressive growth across much of the technology sector.

But Almeida warns those returns may not last forever.

AI Could Face a Familiar Wall

One of Almeida’s more striking comparisons is between today’s AI investment frenzy and the years leading up to the 2008 financial crisis.

He isn’t predicting another financial meltdown.

Instead, he argues that both periods share a similar dynamic: investors assuming enormous capital investments will continue generating exceptional returns indefinitely.

If companies like OpenAI, Anthropic, or other large AI developers begin producing weaker-than-expected returns on the billions they’re investing, the effects could ripple throughout the entire AI supply chain.

That would likely pressure many companies currently benefiting from massive AI spending.

Why Tech Profit Margins May Come Under Pressure

Almeida expects several forces to squeeze corporate profits over the coming years, including:

Higher labor costs
More expensive financing
Increasing competition
Slowing returns on massive AI investments

He believes profit margins remain above sustainable levels and are likely to soften over time.

That outlook explains why MFS has maintained an underweight position in technology hardware despite the sector’s powerful rally.

The strategy has lagged the broader market during the AI boom, but Almeida believes valuations are becoming increasingly difficult to justify.

The Stocks He’s Buying Instead

Rather than chasing the biggest AI winners, Almeida favors companies he calls compounders—businesses capable of consistently growing earnings over long periods.

Industrials

Many industrial companies play critical roles in building data centers, factories, power infrastructure, and other AI-related projects without depending entirely on AI demand.

Among the companies Almeida highlighted are:

Amphenol (NYSE: APH)
Schneider Electric (OTC: SBGSY)
TE Connectivity (NYSE: TEL)
Honeywell (NASDAQ: HON)
Assa Abloy (OTC: ASAZY)

While several trade at premium valuations, Almeida believes their long-term growth extends well beyond today’s AI spending cycle.

Software Infrastructure

Almeida also favors software businesses whose products remain deeply embedded inside corporate operations.

His preferred names include:

Salesforce (NYSE: CRM)
MongoDB (NASDAQ: MDB)
Pegasystems (NASDAQ: PEGA)

These companies provide critical infrastructure around AI implementation while generating strong cash flows with relatively modest growth requirements.

Healthcare Could Be a Surprise Winner

Healthcare has become one of Wall Street’s least-loved sectors after several difficult years.

Almeida believes that creates opportunity.

He specifically likes life-sciences tools companies such as:

Danaher (NYSE: DHR)
Thermo Fisher Scientific (NYSE: TMO)

These firms manufacture specialized equipment expected to play an important role in AI-driven drug discovery and biotechnology research.

Separately, JPMorgan strategists recently noted healthcare now represents roughly 9% of the S&P 500, down from approximately 16% in 2022. They argue the sector offers attractive valuations, durable earnings growth, and potential productivity gains from AI adoption.

Even Consumer Staples Make the List

One of Almeida’s more contrarian ideas is owning global beverage companies.

He believes investors have become overly pessimistic about alcohol consumption among younger generations.

Among his favorites:

Diageo (NYSE: DEO)
Pernod Ricard (OTC: PDRDY)

According to Almeida, these businesses don’t require rapid growth to deliver attractive shareholder returns and currently trade at compelling valuations.

Investors May Need to Broaden Their Search

The AI trade has dominated markets for nearly two years, helping push many technology stocks to historically rich valuations.

Almeida isn’t arguing that artificial intelligence will fail.

Instead, he believes investors should prepare for a future where the biggest gains come from companies supplying the infrastructure, equipment, software, and essential services that support long-term economic growth rather than from the most obvious AI beneficiaries.

If profit margins across the technology sector begin to compress as he expects, today’s overlooked sectors could become tomorrow’s market leaders.