Jitters Continue on the Tech Trade; Creates Opportunities to Own the AI Winners

Research evidence excerpt

Jitters Continue on the Tech Trade; Creates Opportunities to Own the AI Winners

Risks to the Attainment of Our Price Targets and Ratings: Disruptive Technology

● Macroeconomic weakness, including a slowdown in enterprise IT spending, elevated interest rates, or a broader recession, could

pressure capex commitments and delay AI deployment timelines across the hyperscaler, software, and infrastructure ecosystem.

● Rapid technology disruption remains a key risk as the pace of AI model development, custom silicon adoption, and architectural

shifts could displace incumbent vendors faster than expected, particularly within the software complex where the budget

reallocation theme tied to frontier model providers is already pressuring legacy players.

● Competitive intensity is rising across every layer of the AI stack, with hyperscalers building proprietary silicon, neoclouds capturing

infrastructure share, and Chinese domestic alternatives accelerating in response to US export controls, all of which could weigh on

pricing power and market share for our covered names.

● Additional risks include supply chain constraints across memory, advanced packaging, and power infrastructure that could impact

AI buildouts, geopolitical tensions between the US and China that could disrupt the semiconductor supply chain, regulatory actions

targeting AI deployment or large technology platforms, and execution risk on the multi-year capex cycles being underwritten by

hyperscalers and neoclouds.

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