Chris Wood of Jefferies has a warning for investors who chase AI shares

De recordrun van de Wall Street, gebaseerd op de belofte van kunstmatige intelligentie, risico’s te eindigen in “een enorme buste overinvestering” als beleggers de lessen van recente ontwikkelingen in de sector negeren, zoals kapitaaluitgaven door Amerikaanse technologie -reuzen versnellen in een niet -duurzaam tempo, Christopher Wood, Global Head of Equity Strategy at Jefferies, heeft warns.

Wood, who is now talking to ET, said that the momentum of the US stock market has little to do with trade tensions or rates, and is driven instead by what he described as the “AI Capex Arms Race”. Since the beginning of 2023, he noted, four American hyperscalers, together with Nvidia, have taken into account “almost 50% of the profit in the S&P 500.”

The AI ​​Euphoria

“All the evidence at the moment is today that the AI ​​Capex is accelerating,” Wood said, pointing to predictions that the four largest hyperscalers will spend around $ 350 billion this year on AI-related infrastructure. Investors, Wood Argued, Have Brushed Aside Warnings from the Launch of Deepseek Earlier This Year, which Large Language Models Coulde Bocome “Commodities.” “The Market Has Completely Forgotten The Lessonsk, Celebrating is Celebrating and Celebrating and Celebrating and Celebrating and Celebrating and Celebrating and Celebrating and Guke Treking and Guke Treking and Good Braating and Good Braating and Good Braating and Good Braating and Good Braating And Good A Tour and Good Braating And Good Braating and Good Braating and Good Braating and Good Braating and Good Braating -Tour and Good Borning and Good A Tour and Good Borning and Good A Tour and Good Braating Sea Sea Secelebrating. 350 Billion US Dollars This Year on Ai-Related Capex, and Everybody is Celebrating The Data Center Construction, This Will End In A Massive Buste Investment, “said Wood.

Retail-driven rally

The worldwide head of the Equity strategy at Jefferies described the present momentum as a phenomenon driven by the retail trade: “The market thinks that AI is the next major thematic and probably many retail investors buy shares because the AI ​​models tell them to buy the shares, which leads to a reflexive feedback to a racing-lean.” The turnover, “Wood said, adding that reported income is often” artificially exaggerated “because of non-Gaap adjustments.

Beyond rates and trade

Although much attention is focused on the tariff regime of the US President Donald Trump, Wood argued that the stocks of stock have little to do with trade policy. “The American markets are not on the tariff story; the American market runs on the AI ​​theme,” he said.

He contrasted the current business model of the hyperscalers with their earlier “Activalicht” approach. “These hyperscalers go from business models from asset light to asset-heavy,” he said, pointing out that although they generate around $ 100 billion every year, “$ 360 billion is a huge amount to invest in Capex.”

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Risks of reversal

Wood maintained his long -term view that the American market had already reached a peak at the end of last year as a share of global market capitalization. “When that theme relaxes, there will be a major correction,” he said, emphasized that sentiment shifts are the trigger to look at.

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For the time being, the Rally will remain supported by expectations of reductions of the Federal Reserve and by technical provisions in the US tax legislation that have delayed the accounting impact of the flourishing of capital expenses. But Wood’s warning was clear: “If the message of Deepseek is correct, because these large language models are raw materials and we must remember that Deepseek is open, then it is clearly a risk that many of these expenses will be wasted.”