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Quarterly Investment Update
STILL A CASE OF CHIPS WITH EVERYTHING?
In a quarter that saw equity markets recover all of the losses of March and more, it was not a putative agreement between the US and Iran to cease hostilities that catapulted the US and a range of global indices to new highs but a blockbuster earnings season built on an ever-rising commitments to spending on Artificial Intelligence (AI).
With the economic fallout of the Gulf conflict seemingly manageable, investors were sufficiently emboldened to zero in on increasing capital investment commitments from the world’s biggest companies. That number looks to be nearly $800 billion this year. Nearly twice the spending in 2025 and more than the cost of Franklin D Roosevelt’s New Deal in today’s money. The leading recipient of this wave of capital has been the semiconductor or “chips” sector which sits at the bottleneck of core computing power and memory essential to support demand for AI.
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