Source: deVere Group
AI investors should follow three priorities for the rest of 2026, warns the CEO of one of the world’s largest independent financial advisory organisations, as sharp swings are exposing which parts of the AI trade are built on real demand and which are not.
Nigel Green of deVere Group’s comments come as this year’s AI rally is splintering sharply, and this week is making the reason for urgency unmistakable.
Global AI investment is projected to exceed $2.5 trillion in 2026, yet the disconnect between roughly $400 billion in infrastructure spending and only around $100 billion in enterprise AI revenue has become impossible to ignore.
A recent Bank of America fund manager survey found 45% of respondents now flag an AI bubble as the market’s greatest tail risk, up from just 11% a few months earlier, with more than half saying they believe AI stocks are already trading in bubble territory.
“The pattern is on full display this week, and it is exactly why investors cannot afford to wait for clarity before adjusting their approach,” says the deVere CEO.
“Asian stocks slipped on Thursday as a recent tech-led rally on Wall Street paused, with the MSCI Asia Pacific Index down 0.2% and South Korea’s Kospi falling 1%.
“The S&P 500 pulled back from a record high, and an index of semiconductor stocks lost more than 1%, even as Nvidia itself advanced.
SpaceX tumbled 14% despite posting strong earnings, ahead of the release of roughly $101 billion of shares becoming available for trading Thursday.
One session captured the whole story: strong results still triggering a sharp share-price fall, and a broadly steady chip sector still unable to prevent a sector-wide pullback.
The same split has shown up repeatedly in recent weeks.
Nvidia shares fell 5% in a single session after reports it was pursuing a payment guarantee of up to $250 billion for OpenAI’s data centre lease, alongside discussions for up to $350 billion in additional financing, pushing the company’s market cap below Apple’s for the first time in over a year. Its five-year credit default swap premium surged by the largest single-day amount on record on the news.
SK Hynix posted record quarterly revenue, up 257% year-over-year with a 76% operating margin, and still fell 9% on the earnings call, underscoring how quickly sentiment has turned even for companies delivering strong results.
Nigel Green says this is the moment investors need to stop treating the AI trade as settled and start applying real scrutiny.
“Markets are no longer giving AI companies the benefit of the doubt just because they are spending heavily,” he says. “What happened this week, and in the previous weeks, should be a wake-up call. Strong earnings did nothing to stop a 14% single-day fall. This only happens when investors have already decided that headline growth is not enough on its own anymore.
“Waiting for more certainty before adjusting positioning is itself a risk now.”
He sets out three priorities investors should apply to the AI trade through year-end.
1. Differentiate within the sector rather than treating it as one bet.
Micron, Applied Materials, and Cisco have each posted genuine earnings strength this year on the back of real component shortages and cloud-provider demand, with Cisco raising its 2026 revenue guidance to $62.8 to $63.0 billion on solid AI data-center orders. This stands in sharp contrast to companies whose growth increasingly depends on vendor financing arrangements between suppliers and their own customers.
“The AI trade stopped being a single story months ago, and treating it as one is the fastest way to get this wrong,” Nigel Green explains.
“Some companies are seeing real, measurable demand for the physical components that power this build-out. Others are increasingly reliant on complex financing arrangements to sustain their growth narrative.
“Lumping them together in one portfolio decision is no longer defensible.”
2. Watch balance sheets, not just growth stories.
SpaceX has erased roughly $1.2 trillion in market value since its record-setting June IPO, sitting 47% below its June 16 closing high, pressured by lock-up expirations, Starship test setbacks, and now a fresh $101 billion share unlock landing squarely on an already battered stock.
Meanwhile, Alphabet, Amazon, Meta, and Microsoft’s collective 2026 capital expenditure is set to jump 77% to a record $725 billion, well above the $500 billion analysts originally expected, against a combined contractual backlog across the group of roughly $2.1 trillion.
“The stocks under the most pressure this year aren’t simply the ones spending the most on AI infrastructure,” notes Nigel Green.
“They’re the ones carrying the largest financing entanglements and debt-guarantee exposure. Investors screening for growth alone, without looking at what sits underneath it, are missing the signal that actually matters right now.”
3. Expect volatility around each earnings date rather than a steady trend.
The price-to-earnings ratio has climbed above 40, a level last seen before the dot-com crash, and this week’s 14% swing in SpaceX shares on strong earnings, not weak ones, shows exactly how easily financing can unlock events and overwhelm fundamentals in the short term.
“This year has taught investors that AI-adjacent stocks can move 5% to 10%, and sometimes considerably more, in a single session on financing news alone, in either direction,” Nigel Green says.
“Investors need to size positions accordingly, because waiting for a calmer market before adjusting exposure is not a realistic strategy right now.
“Sharp single-day moves around individual earnings dates are very different from a gradual repricing of the sector, and the two need to be told apart urgently.”
Nigel Green concludes that the investors who move decisively now, rather than waiting for the picture to become fully clear, will be the ones best positioned through year-end.
“The investors who do well for the rest of 2026 are likely to be the ones who stopped asking whether AI as a sector is a good bet months ago.
“The more useful question is which parts of the AI trade are built on real demand and which are built on financing structures that still need to prove themselves.
“Getting that distinction right, and acting on it sooner rather than later, is the work in front of every investor holding AI exposure today.”
deVere Group is one of the world’s largest independent advisors of specialist global financial solutions to international, local mass affluent, and high-net-worth clients. It has a network of offices around the world, more than 80,000 clients, and $14bn under advisement.