Barron's Live The AI Trade: Where It's Going, How to Play It
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Oct 6, 2025 Denny Fish, Portfolio Manager at Janus Henderson Investors and an expert in tech and AI, shares insights on navigating the AI investment landscape. He discusses the implications of the OpenAI-AMD deal and compares current market dynamics to the 1990s tech bubble, asserting that valuations are still reasonable. Denny recommends a strategy for retail investors focused on enablers, enhancers, and end users of AI. He also touches on the challenges faced by major companies in the current market and discusses the future of quantum computing.
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AMD Deal Signals Supply Hedge Not Parity
- The AMD–OpenAI deal is more of a hedge by OpenAI, while Nvidia securing equity signals deeper strategic preference for Nvidia chips.
- OpenAI taking equity in AMD suggests supply diversification rather than equal technological endorsement.
Current Valuations Don’t Look Like Classic Bubble
- Current valuation levels for many big tech and semiconductor firms are not extreme compared with past bubbles when winners traded at 70–100x earnings.
- Given AI's potential to reshape profits and governments' push for sovereign AI, the market doesn't yet read as a classical bubble.
Natural Supply Governor Limits Overbuild Risk
- Unlike the 1990s telecom overbuild, GPU and datacenter capacity faces a supply bottleneck with long build times and highly utilized chips.
- That natural governor reduces the risk of immediate severe oversupply and mitigates classic boom-and-bust dynamics.