Asset managers bet on AI winners

Following the latest earnings season, the AI investment narrative has shifted from whether Big Tech's massive capital expenditures will pay off to identifying which companies will deliver long-term returns. Microsoft and Amazon (company) reported results that reassured markets of robust demand for AI infrastructure, with accelerating cloud growth and persistent capacity constraints. Asset managers are retaining significant semiconductor positions despite a July sector rout, while increasing exposure to hyperscalers—the largest cloud providers—which are seen as key beneficiaries of the AI paradigm shift. The four biggest AI capex spenders lagged the 75% surge in the Philadelphia Semiconductor Index, as well as rallies in Nvidia-backed CoreWeave (up ~50%) and Nebius Group (up over 200%), neocloud providers that rent computing power. Janus Henderson Investors's Richard Clode expects hyperscalers to grow profits and cash flow faster than incremental capex by 2028, and he holds Amazon (company) as a top overweight. Capital Group's John Lamb views AI as an expanding ecosystem where both chips and hyperscalers belong in portfolios. BCA Research's Noah Weisenberger recommends a long-hyperscalers, short-neoclouds trade, citing neocloud vulnerability to capacity additions and pricing normalization. LGF+ZEST's Alberto Costa estimates AI monetization needs a fivefold to thirteenfold increase to justify current spending. Wellington Management Company's Brian Barbetta expects competition to narrow the field of AI winners, with fewer future winners than players today.