Investment Q&A

It is an interesting question. A couple of points: right now, valuations (on a P/E basis) for many tech stocks is below where it was in early 2022 and 2021. In other words, there is currently no premium for AI growth. It's like it never happened. Two, we think AI demand will be in place for a period of time, but the cost structure will not be immune from tariffs. In other words, a company will likely still build data centres, but it might not make the same amount of margin as pre-tariffs. Three, there is a solid theory that more efficient AI (ala DeepSeek) will result in thousands of more applications, and thus demand may not see such a dramatic fall off as some people expect. This of course will take time, but things like ChatGPT's image generators are using way more power than expected, and becoming exceptionally popular. This implies at least continued growth in the near term. Many companies are sold out for 12 to 18 months, with good backlogs. Beyond that timeframe, though, uncertainty increases sharply.