Peter Oppenheimer

The UK domestic market (FTSE 350) is very cheap, trading at around the 15th percentile of its historic PE, and is overpricing weakness in the economy, offering a lot of value.

Massive hyperscaler spending on AI infrastructure is trickling out into better earnings growth in non-tech sectors and regions, particularly Europe. European equities offer a valuation advantage even after sector adjustment, profits are holding up, and value-oriented areas are generating strong cash flows and shareholder returns. Despite much lower technology exposure, Europe has performed as well as the S&P year-to-date. Profit growth will drive markets, and Europe stacks up well for moderate index gains.

The KOSPI has had extraordinary gains but is heavily dominated by chip and memory stocks directly benefiting from CapEx spending; Goldman expects 320% earnings growth this year and maintains a positive view on the broad market, though gains will moderate.

A multi-year increase in government-led capital spending on infrastructure, supply chains, energy capacity, and defense is driving demand for physical assets and creating a sustained investment cycle across major economies.

Massive AI commercialization CapEx is directly driving chip and memory stocks as the core beneficiaries of exponential compute demand.

Global equities will be driven by fundamental earnings growth in the second half, supported by still healthy nominal GDP and massive CapEx around AI commercialization that benefits technology and infrastructure companies; equities should make reasonable gains and be relatively broad-based.

US tech stocks are attractive because tech profits are growing around 40% year over year, and the sector has derated, now having a lower valuation than industrials, which is unusual, and there is reasonable upside.

Investors are re-rating the AI trade from software to "physical infrastructure" (data centers, energy supplies) due to intense Capex demands. Software companies are de-rating due to uncertain returns, but the build-out of the physical grid and cooling systems required to run AI is capital-intensive and non-negotiable. This creates a "pick and shovel" play on power management and electrical infrastructure. Long Electrical Infrastructure & Power. Regulatory pauses on data center power consumption.

Investors are re-rating the AI trade from software to "physical infrastructure" (data centers, energy supplies) due to intense Capex demands. Software companies are de-rating due to uncertain returns, but the build-out of the physical grid and cooling systems required to run AI is capital-intensive and non-negotiable. This creates a "pick and shovel" play on power management and electrical infrastructure. Long Electrical Infrastructure & Power. Regulatory pauses on data center power consumption.

Investors are re-rating the AI trade from software to "physical infrastructure" (data centers, energy supplies) due to intense Capex demands. Software companies are de-rating due to uncertain returns, but the build-out of the physical grid and cooling systems required to run AI is capital-intensive and non-negotiable. This creates a "pick and shovel" play on power management and electrical infrastructure. Long Electrical Infrastructure & Power. Regulatory pauses on data center power consumption.