AI Investing: Climbing the Wall of Worry

Far from being in a euphoric bubble about AI, looking at the fundamentals and the shrinking valuations of some of the AI infrastructure companies, we are climbing a “wall of worry” of epic proportions. When it comes to the AI investment opportunity set, many market participants have expressed concerns about valuations, soaring capex, choke points that will act as limiting factors for AI capacity rollouts, lack of funding/financing, and the impact of AI on other industries, with software in particular being in the crosshairs. While we are monitoring all these factors, we believe that the changing dynamic in software is the only valid concern at this time.