Recorded at 9:00 a.m. in London on Friday 8th May
In this “Fireside Chat,” Gavyn Davies, Founder and Executive Chairman and Fawaz Chaudhry, Partner and Head of Equities, discuss the following
- The AI infrastructure providers remain supply-constrained in physical capacity and continue to raise capex plans in response to projections of increasing demand
- Further surges in equity prices are leading to concerns about the potential overvaluation and dominance of the AI sector, but the infrastructure providers have underperformed the market recently
- Forward PE ratios in the information technology sector are low relative to their 5-year history and recent earnings revisions have been strongly positive supported by AI demand in the US and across key Asian semiconductor markets
- The US remains well-positioned in AI, with leading cloud infrastructure and hardware champions offsetting some pressure on software companies facing AI disruption
- Financing of the largest “hyperscalers” in data centre investment is increasingly absorbing operating cash flow but debt financing will not strain balance sheets
- The growth of the data centre build-out is boosting US GDP growth by about 0.5% per annum, with the overall impulse at 1-1.25% after allowing for the wealth effect of higher stock prices on consumption
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