TechFlow News, May 11: According to JPMorgan’s forecast, U.S. mega-cap tech companies will spend up to $700 billion on capital expenditures in 2026, with the majority allocated to AI infrastructure. Companies like NVIDIA rely on Asian suppliers for 90% of their hardware. Recent estimates for AI-related capital spending this year and next have been steadily rising—a trend that benefits Asia’s derivative exposure to such spending.
Capital expenditures by U.S. mega-cap tech firms on AI hardware primarily benefit Asian technology companies, while having a relatively modest impact on U.S. GDP. JPMorgan emphasizes that earnings growth in emerging markets is not only more attractive but also priced at more reasonable valuations. The price-to-earnings (P/E) ratio for this asset class is low in absolute terms—and “historically low” relative to developed markets. Moreover, investor positioning remains light, and inflows are accelerating. (Jinshi)
