For much of the past decade, global markets have been dominated by companies built on intangible assets, such as software platforms, intellectual property, and data ecosystems. Increasingly, however, investors may be entering a new phase shaped by large-scale investment in the physical economy, which represents the tangible, material, and energy-intensive industries.
In a recent two-part article series, William Blair Investment Management’s Olga Bitel, partner, global strategist, examines what she calls the “revenge of the tangibles,” a global investment cycle centered on renewed spending on physical assets and industrial development.
“Markets appear to be entering a new phase shaped by physical buildout across artificial intelligence infrastructure, defense, energy, and supply chains,” Bitel said. “This shift reflects a broader global building cycle that is driving growth and returns beyond the U.S. and across a wider range of industries and regions.”
In the first article, “Revenge of the Tangibles,” Bitel outlined how this cycle is emerging as governments and companies invest in infrastructure for new technologies. The expansion of AI, for example, is driving demand for data centers, semiconductor manufacturing, and power infrastructure—all requiring significant energy, materials, and industrial capacity.
In the follow-up piece, “A Broader Market Awakening,” Bitel explored how these forces are already reshaping markets. After a decade of U.S. equity outperformance, early signs in 2025 and 2026 suggest a broader set of regions and industries may lead the next investment cycle.
Two Forces Driving Change
To Bitel, two major forces are driving this shift: technological transformation and geopolitics.
As AI moves from concept to infrastructure buildout, massive data centers are being constructed globally. These facilities require semiconductors, cooling systems, power generation, transmission networks, and connectivity infrastructure, along with the physical systems that support them, from roads to airports to industrial supply chains.
At the same time, geopolitical developments are pushing countries to prioritize economic autonomy and national resilience. Governments are investing in domestic energy systems, defense capabilities, and supply chains to reduce dependence on global networks.
“The common thread across these developments is the construction of infrastructure, supply chains, and industrial capacity,” Bitel said. “Markets are reflecting that shift.”
These dynamics are also shaping investment opportunities worldwide. Defense investment is rising in countries like Germany and Japan, semiconductor ecosystems remain concentrated in Taiwan and South Korea, and critical metals production is expanding across emerging markets, including Chile, Mexico, and South Africa.
For investors, periods of dislocation often create opportunity. The current environment appears to be one of those periods.
OLGA BITEL, Partner, Global Strategist
Three Key Focus Areas for Investors
As this investment cycle unfolds, Bitel highlighted several areas investors may be watching closely:
- Economics of AI Infrastructure: Technology companies are investing heavily in data centers and related capacity, and markets must evaluate whether the long-term returns justify the scale of that spending
- Future of Software and Digital Platforms: While demand for software will likely grow as AI capabilities evolve, it remains uncertain which companies will capture the largest share of those profits
- Who Qualifies as a “National Builder": As countries prioritize domestic resilience, policymakers may favor companies that serve as trusted suppliers for energy, defense, and infrastructure projects
Turning Dislocation Into Opportunity
The combination of technological investment and geopolitical priorities suggests that the current environment may represent the early stages of a broader global investment cycle—one that may persist, according to Bitel.
“For investors, periods of dislocation often create opportunity,” Bitel said. “The current environment appears to be one of those periods.”