TechCapsules

AI-summarised brief · reviewed before publication

Goldman Sachs Asset Management’s Luke Barrs stated on CNBC that the artificial intelligence capital spending cycle is in its early stages, marking a shift from consumer-led to corporate capex-led economic growth. He warned that leadership is rotating away from previous market winners like NVIDIA, despite their past success. Hyperscalers including Amazon, Microsoft, Google, and Meta are increasing spending plans, with top firms projected to reach nearly $800 billion in 2026 capex and $1.3 trillion in 2027. The cloud industry backlog exceeds $2 trillion. Barrs noted that while headline earnings growth appears at 50% year-on-year, organic growth remains robust at 25% to 30% after adjusting for tariff refunds and accounting effects. This transition indicates that committed corporate budgets drive the current market dynamics, creating a constructive backdrop for equities. Investors must recognize that the stocks fueling the previous rally may not lead the next phase, as the earnings story expands across the broader AI supply chain rather than concentrating solely in established hardware leaders.