Analysis:Big investors hunt for tomorrow's AI winners as capex angst fades

Investors are increasingly focusing on which companies will deliver long-term returns from the artificial intelligence (AI) investment story, rather than questioning whether Big Tech's spending spree will pay off, according to wire reports. Microsoft and Amazon's recent results have reassured markets that demand for AI infrastructure remains robust, with cloud growth accelerating and capacity constraints persisting.

Asset managers are now trying to identify companies capable of sustaining profit growth once these constraints ease.

Top AI capex spenders, such as Nvidia-backed CoreWeave and Nebius, have lagged the performance of the four biggest AI capex spenders, which include the hyperscalers. The hyperscalers, or the biggest cloud service providers, are seen as likely beneficiaries of the AI paradigm shift due to their scale and ability to rapidly expand AI infrastructure to meet customer demands.

Brian Barbetta, co-head of the technology platform at Wellington Management, noted that hyperscalers are core holdings in their portfolios and they have increased their positioning in these companies recently.

Despite the challenges faced by AI monetisation, Barbetta expects competition to narrow the field of AI winners over time, with those companies possessing the broadest technology portfolios, deepest customer relationships, and greatest control over their own infrastructure likely to emerge as the future winners.