Barron's Streetwise Is A.I. Spending Sustainable?
8 snips
Oct 10, 2025 
Venu Krishna, Head of U.S. equity strategy at Barclays, dissects the sustainability of AI spending compared to the dot-com bubble. He argues this tech cycle is unique, emphasizing first-mover advantages and identifying key market warning signs. Venu highlights that current AI capacity exceeds demand and discusses potential risks, such as power constraints and funding challenges. He also outlines how investors can hedge against risks by exploring auxiliary beneficiaries and employing specific options strategies. Tune in for a thought-provoking analysis!
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AI Is A Transformative Yet Risky Cycle
- AI and cloud define a transformative tech cycle but markets may be getting ahead of fundamentals.
- Barclays finds similarities to the dot-com era in contours, not fundamentals, so risks deserve focused attention.
Demand Currently Outstrips Compute Supply
- Current demand for AI compute outstrips supply and big spenders are already deploying capacity in core businesses.
- Enterprise-level utilization lags consumer usage, so more corporate adoption could drive sustained demand.
Dark Fiber Risk Meets First-Mover Pressure
- The 'dark fiber' analogy warns of mistimed infrastructure investment that pays off much later.
- First-mover advantages and platform effects push firms to spend now despite timing risks.