Investing.com -- Bank of America analyst Nigel Tupper told investors in a note Tuesday that crowded positioning in equities is “not always a contrarian signal,” highlighting a group of heavily owned stocks that its quantitative work suggests can continue to outperform if the global cycle remains supportive.

In the bank’s outlook for 2026, the analyst stated that the “setup for equities appears constructive,” citing a strengthening global earnings cycle, improving news sentiment and central banks that are “generally still in easing mode.”

BofA added that “robust data and rate cuts create a positive setup for 2026,” even as macro risks persist.

A small number of themes are said to have driven market performance, including AI, defence, nuclear, gold, rare earths and quantum computing.

From a quantitative perspective, BofA believes “Triple Momentum (earnings, price, news) is more positive on these six themes than almost all global sectors,” while valuations are “not as stretched as many might believe.”

Within this backdrop, BofA noted that its reengineered global positioning framework distinguishes between crowded stocks that outperform and those that lag.

The bank said so-called “Crowded Positives,” stocks with heavy ownership but favourable momentum, currently include Broadcom, TSMC, Tencent, Samsung Electronics, SK Hynix and Wells Fargo.

By contrast, BofA flagged a group of “Crowded Negatives,” where dense positioning has historically coincided with underperformance. These include Walmart, Costco, Meituan, Coca-Cola, Home Depot and Accenture, according to BofA.

At a regional and sector level, BofA feels Triple Momentum is strongest in areas such as U.S. semiconductors, European banks, Japanese semiconductors and U.S. banks, while it is weakest in U.S. real estate and consumer staples.

The bank added that if the global cycle remains robust in 2026, current positioning trends, including rotation away from U.S. equities, “could continue.”