The hyperscalers were priced to perfection last year on expectations of a quick, successful AI rollout.
Host
Karen Ward
The 'quick' part of the AI rollout looks 'sticky' due to significant production cost bottlenecks without proportional quality improvement.
Asks if it's positive that CapEx restraint is now being rewarded by investors, referencing LSEG's David Schwimmer.
Host
Karen Ward
Investors are right to be skeptical; the market was too optimistic last year on who will buy AI products and at what price.
Karen Ward
The market now demands proof of ROI on AI CapEx before endorsing more spending, a shift from last year's blind conviction.
Asks how much further the rotation away from US stocks has to go, given her skepticism on megacap tech.
Host
Karen Ward
Fundamentally, no one knows if AI will change the world or deliver ROI; there are too many unknowns.
Karen Ward
Does not want 30% of a US allocation in a part of the market (megacap tech) with enormous questions.
Karen Ward
Believes the rotation away from megacap tech still has a lot further to go, primarily within the US market.
Karen Ward
Is more optimistic about Europe, which is not 'priced for perfection' and where skepticism remains high.