Peter Andersen, founder of Andersen Capital Management, said investors are starting to reassess the returns on artificial intelligence capital spending, a shift he believes could make future market gains depend more on stock picking than on simply owning the S&P 500. In his view, the earlier trade of buying anything tied to AI is losing steam as investors ask whether heavy spending can actually produce revenue and cash flow.
Andersen said the AI investment theme is not over, but large technology companies now face pressure to show that their massive outlays can turn into real business results. He added that capital may begin moving into areas that had received less attention, naming quantum computing, European defense, and equipment rental as examples. He also said he sees long-term potential in quantum computing and views the field as a possible direction for the next round of competition in computing technology, according to TheStreet.
Peter Andersen, founder of Andersen Capital Management, said investors are beginning to reassess the payoff from artificial intelligence capital spending, and that future market returns may rely more on stock selection than on simply buying the S&P 500.
He said the earlier market trade of buying anything linked to AI is cooling, with capital potentially rotating into areas that had been overlooked, including quantum computing, European defense, and equipment rental.
Andersen added that the AI investment trend is still in place, but large technology companies need to prove that heavy capital spending can be converted into actual revenue and cash flow. He also said he is positive on the long-term potential of quantum computing and sees it as a possible direction for the next phase of competition in computing technology, according to TheStreet.
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