Ruy Alves, co-manager at Kinea, has cautioned that the massive capital expenditure by US technology firms on artificial intelligence may not generate proportional returns for investors in the software and services layer.
Instead, Alves advocates for a strategic shift toward semiconductor manufacturers, arguing that equipment makers present a more secure path to profitability in the current market cycle.
The comments reflect a growing divergence in sentiment among institutional investors regarding the sustainability of the AI trade.
While the sector has enjoyed a relentless rally, cautious portfolio managers are increasingly questioning the valuation multiples in the most crowded corners of the market.
Technical indicators for AI stocks have pointed to a continuation of downtrends, despite recent short-term price recoveries, suggesting that the momentum may be waning.
Alves characterizes the AI boom as a "great magic trick," implying that the visible spectacle of software innovation may obscure the underlying economic realities.