Despite the constant talk of artificial intelligence (AI), Citi analysts said in a note to clients Friday that energy has become the most crowded sector in the US.
The investment bank revealed that price momentum has been the best-performing factor across most regions this year and has now become the most crowded Quant factor in the US.
However, the firm warned that "previous research shows that once price momentum becomes the most crowded factor, it tends to underperform in the next 1-6 months."
"While much of the headlines are focused on AI/Tech stocks recently, energy has become the most crowded sector in the US," they stated, adding that energy remains most crowded in Japan and across much of Europe and Asia.
Furthermore, even though tech is the most crowded in Asia, it is only near the middle of the US and Europe, according to Citi.