AI: The companies hurting the most from latest infrastructure boom
View original at finance.yahoo.comAI: The companies hurting the most from latest infrastructure boom US stocks (^DJI, ^IXIC, ^GSPC) closed Wednesday's session in positive territory — the Nasdaq Composite leading the way in gains — as investors ease up around AI worries tied to last week's sell-off in the software sector…
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For immediate growth, investors should look to AI infrastructure names in construction, power, and cooling rather than software companies
80% confidenceMaybe two rate cuts towards the second half of 2026
80% confidenceInvestors are wise to question the amount of spending software companies are doing on AI and how they're financing it, but they need to be patient because ROI won't be seen for years
80% confidenceLooking back to 1950, there have been five times where the stock market rallied double digits over three consecutive years, and in the fourth year the market was only positive 40% of the time with average return under 20 basis points
80% confidenceThe market can continue to move higher without Fed rate cuts if the economy is still growing, inflation is moderating, and employment remains stable
80% confidenceTaiwan Semiconductor stock is up 20% year to date
80% confidenceUS markets are dominated by three sectors: Information technology, communication services, and consumer discretionary, while international developed markets are dominated by health care and financials
80% confidenceThe international outperformance divergence may not continue due to multiple tailwinds for US markets including deregulation, potential interest rate reductions in second half of year, and massive CAPEX spending
80% confidenceThere will be between 3 and 4 trillion dollars spent on AI infrastructure by the end of this decade
80% confidenceThere are multiple market rotations taking place in 2026: small cap over large cap, value over growth, and international over US
80% confidenceIron Mountain pivoted from storing paper documents to leasing excess warehouse space to data centers
80% confidenceEmerging markets are outperforming developed markets within international equities
80% confidenceBy the second year after three consecutive double-digit years, the market is higher 100% of the time by an average return of 27%
80% confidenceDuke Energy pays a dividend yield of about 3.3%, trades at 18 times forward earnings, and stock is up over 10% year to date
80% confidence2026 will be more of an idle year with next year being more positive
80% confidenceTaiwan Semiconductor is a good play not just for 2026 but for the balance of this decade
80% confidenceMore short-term bouts of volatility expected throughout 2026
80% confidenceInternational has been significantly outperforming the US over the course of the last full one-year period
80% confidenceDuke Energy owns and operates 11 different nuclear sites on six different locations in North and South Carolina
80% confidenceData center maintenance goes on in perpetuity unlike data center construction
80% confidenceAI infrastructure spending is not even at a trillion dollars right now
80% confidenceThe Federal Reserve's neutral rate for Fed funds target rate is 3%, currently at 3.5% to 3.75%
80% confidenceThe new Federal Reserve chair won't be as dovish as many had earlier thought
80% confidenceInternational markets have been outperforming US markets, with international up around 9% while S&P 500 is up less than 1% so far in 2026
80% confidence
Data points we hold from this source
| Board of Governors of the Federal Reserve System · neutral rate | 3 percent |