TechFlow news, November 7 — Japan's largest technology fund said artificial intelligence stocks are not in a bubble phase and still have room to rise. Yasuyuki Fukuda, chief portfolio manager of Nomura Asset Management's Japan Information & Electronics Equity Fund, said the AI market is only "entering its second stage."
In the latest wave of AI enthusiasm, the Nomura fund has performed exceptionally well, delivering a total return of 49% as of November 6, outperforming the U.S. Nasdaq Index.
Fukuda noted today's IT stock market is entirely different from the internet bubble 25 years ago. During the dot-com bubble, companies investing in telecom network infrastructure were mostly startups without profits or cash flow, making fundraising extremely difficult and ultimately leading to market collapse.
Today, the investment drivers are cash-rich giants such as Meta, Google, and Amazon, creating a more sustainable environment for infrastructure investment. He said investments in data centers and other cloud computing infrastructure represent the "first stage" of the AI growth story, while the next wave of growth will be driven by increased capital spending from traditional infrastructure firms such as telecommunications and electric utilities. (Kitco)
