Concerns are growing among Chief Information Officers and investors regarding the substantial spending on artificial intelligence infrastructure. A Bank of America survey reveals a record 35 percent of investors and many CIOs believe companies are overinvesting in AI capital expenditure, with only 20 percent of CIOs looking to increase spending, a notable drop from 34 percent previously. Many foresee an "AI bubble" as a significant market risk for 2026, and heavy data center spending could lead to credit issues. Despite these worries, major tech players like Meta, Amazon, and Microsoft continue to pour significant funds into AI, with Amazon's $200 billion plan being a prominent example, and Morgan Stanley projects $740 billion in hyperscaler spending by 2026.
This shift in investor sentiment is also impacting the market for new stock listings in Europe, where traditional industries such as defense and manufacturing are gaining appeal as investors pull back from AI-related companies. Experts suggest that these "brick-and-mortar" sectors, particularly those involved in energy infrastructure and military upgrades, offer safer investment opportunities. Meanwhile, the London Stock Exchange Group appears undervalued due to investor fears that AI could negatively affect its profitable data business, potentially presenting an investment opportunity given its stable income streams and high barriers to entry for new exchanges.
AI is also finding diverse applications across various sectors. In the art market, tools from companies like Artscapy, which uses a ChatGPT model trained on sales data, and MyArtBroker, employing predictive machine learning with human oversight, help collectors like Stephen Smith value artworks and avoid overpaying. Elsewhere, MindBio Therapeutics is developing Edge AI hardware for voice-based intoxication detection, with manufacturing and deployment planned for the second quarter of 2026, initially targeting the mining industry in South America to enhance workplace safety.
In the cybersecurity realm, Palo Alto Networks CEO Nikesh Arora defends the sector, stating that AI actually enhances security systems by improving consistency and speeding up responses, despite an 8 percent drop in the company's shares. Chipmaker Analog Devices forecasts strong second-quarter sales, projecting $3.5 billion, largely driven by the increasing demand for semiconductors essential in AI data centers. Furthermore, AI leader Palantir recently moved its headquarters from Denver to Miami, Florida, citing a conflict with Silicon Valley's values, making it the largest publicly traded company headquartered in South Florida with a valuation over $300 billion.
From a sustainable investing perspective, Hamish Chamberlayne of Janus Henderson is acquiring shares in companies perceived as "AI losers," such as Experian and S&P Global, believing them to be undervalued. He also anticipates that AI's societal impacts, including poverty and fairness, will become a more central concern for sustainable investors than climate change. Additionally, he identifies investment opportunities within the infrastructure supporting AI data centers, specifically in semiconductors and power systems.
Key Takeaways
- A Bank of America survey indicates a record 35 percent of investors and many CIOs believe companies are overspending on AI infrastructure, with only 20 percent of CIOs planning to increase spending.
- Concerns about an "AI bubble" are rising, with many seeing it as the biggest market risk for 2026, and heavy AI data center spending could lead to credit problems.
- Despite investor wariness, major tech companies like Meta, Amazon, and Microsoft continue significant AI investments, including Amazon's $200 billion plan, with Morgan Stanley forecasting $740 billion in hyperscaler spending by 2026.
- Europe's IPO market is shifting focus to traditional industries like defense and manufacturing as investors pull back from AI-related companies.
- AI tools, including those using a ChatGPT model by Artscapy, are helping art collectors value works, track collections, and increase buyer confidence.
- MindBio Therapeutics is developing Edge AI hardware for voice-based intoxication detection, targeting the South American mining industry for deployment in Q2 2026.
- Palo Alto Networks CEO Nikesh Arora asserts that AI enhances cybersecurity by improving system consistency and response times, despite recent stock drops.
- Analog Devices expects strong Q2 sales of $3.5 billion, driven by high demand for semiconductors used in AI data centers.
- Palantir, valued over $300 billion, relocated its headquarters from Denver to Miami, Florida, citing a conflict with Silicon Valley's values.
- Janus Henderson's sustainable fund is investing in
AI Tools Help Art Buyers Find Fair Prices
Art collectors like Stephen Smith use AI tools to value art, helping them avoid overpaying. It is usually hard to know art prices because galleries do not share them and sales are private. Companies such as Artscapy and MyArtBroker now offer AI-powered valuation services. Artscapy uses a ChatGPT model trained on various sales data, while MyArtBroker uses predictive machine learning with human oversight. These tools aim to give buyers more confidence and help track collection values.
New AI Tools Help Art Collectors Value Works
Art collectors often struggle to know fair prices for artworks due to private sales and undisclosed gallery prices. Stephen Smith, an art collector, uses MyArtBroker's AI tool to get accurate valuations for prints like Bridget Riley's Echo. Companies like Artscapy and MyArtBroker now offer AI-powered tools that provide price estimates, increasing buyer confidence. Artscapy uses a ChatGPT model trained on specific art sales data, while MyArtBroker uses predictive machine learning with human experts. These tools help collectors track their art's value and can even support art-backed loans or insurance. Artnet and Beowolff Capital are also exploring AI for art market data.
CIOs Worry Companies Spend Too Much on AI
A Bank of America survey shows that many Chief Information Officers believe companies are spending too much on AI infrastructure. A record number of CIOs think companies are overinvesting in capital expenditure for AI. Only 20 percent of those surveyed want to increase spending, a drop from 34 percent. Many see an "AI bubble" as the biggest risk to the market in 2026. Some also fear that large AI data center spending could cause a major credit problem.
Investors Grow Wary of High AI Spending
Investors are growing concerned about the high amount of money companies are spending on AI. A Bank of America survey shows a record 35 percent of investors believe companies are overspending. While AI news once boosted stock prices, now announcements of increased AI spending, like Amazon's $200 billion plan, can cause stocks to drop. This heavy spending on AI infrastructure also means less money for stock buybacks, which have supported the market. Despite these concerns, major tech companies like Meta, Amazon, and Microsoft continue to invest heavily in AI, with Morgan Stanley forecasting $740 billion in hyperscaler spending for 2026.
Europe Turns to Traditional IPOs Amid AI Market Drop
Europe's market for new stock listings, called IPOs, might recover by focusing on older industries like defense and manufacturing. Investors are pulling back from AI-related companies, making traditional sectors more appealing. These "brick-and-mortar" industries, especially those involved in energy infrastructure and military upgrades, are seen as safer investments. Experts like Tom Snowball from BNP Paribas believe defense and industrial companies can still launch successful IPOs. John Lamb of Capital Group finds software IPOs particularly risky right now. Kirsty Desson from Aberdeen Group sees strong growth in European defense and infrastructure spending.
London Stock Exchange Group Undervalued After AI Fears
The London Stock Exchange Group, or LSEG, appears undervalued because investors worry AI could harm its data business. This drop in share price might be a good chance for investors. Exchanges like LSEG make money from several sources, including trading fees, clearing services, company listings, and selling market data. Their data and analytics business is especially profitable and provides steady income. Starting an exchange is difficult due to strict rules and high technology costs, giving existing exchanges a strong advantage. LSEG is one of the ten most important exchanges worldwide.
MindBio Develops AI Hardware for Voice Intoxication Detection
MindBio Therapeutics is creating a new hardware platform with Edge AI to detect intoxication using voice. The company plans to start manufacturing the hardware and deploying it in the second quarter of 2026. MindBio will first target the mining industry in South America, working with Chilean operators to create a specific testing method. This technology offers a non-invasive way to check for intoxication, which is a major safety concern in mining and other heavy industries. The platform aims to reduce workplace accidents, as many are linked to substance use.
Janus Henderson Fund Buys Undervalued AI-Impacted Stocks
Hamish Chamberlayne, who manages Janus Henderson's sustainable fund, is buying shares in companies that investors see as "AI losers." He believes these information services companies, like Experian and S&P Global, are now undervalued. The fund focuses on sustainability and follows strict EU rules for environmental, social, and governance investments. Chamberlayne thinks AI's impact on society, like poverty and fairness, will become a bigger concern for sustainable investors than climate change. He also sees investment opportunities in the infrastructure needed for AI data centers, such as semiconductors and power systems.
Analog Devices Forecasts Strong Sales Driven by AI Chips
Analog Devices, a chipmaker based in Wilmington, Massachusetts, expects strong sales for its second quarter. The company forecasts revenue of $3.5 billion, which is higher than what analysts predicted. This growth is largely due to the increasing demand for semiconductors used in AI data centers. The AI boom is helping to overcome difficult economic and global conditions. Analog Devices also reported first-quarter revenue of $3.16 billion, which was better than expected.
Palo Alto CEO Defends Cybersecurity Amid AI Stock Drop
Palo Alto Networks Inc. shares dropped 8 percent after its second-quarter earnings report. CEO Nikesh Arora stated he does not understand why the market views AI as a threat to cybersecurity. He believes AI actually helps cybersecurity by making security systems more consistent and allowing for faster responses. Palo Alto Networks has invested significantly in AI, releasing new tools and acquiring companies to boost its cybersecurity abilities. Arora is confident that AI will not replace security products, noting that many now include AI-powered assistants. He sees the company moving into a new stage of AI use, with customers giving positive feedback.
AI Leader Palantir Relocates Headquarters to Miami Florida
Palantir, a leading AI company, has moved its headquarters from Denver to Miami, Florida. This marks the company's second major relocation in six years, having previously left Silicon Valley in 2020. CEO Alex Karp mentioned a conflict with Silicon Valley's values as a reason for the move. Palantir, valued at over $300 billion, is now the largest publicly traded company headquartered in South Florida. The move is part of a larger trend of tech leaders and companies relocating to Florida, drawn by benefits like no state income tax and fewer business regulations. Florida leaders see Palantir's arrival as a key moment for the state's growth in national security and AI innovation.
Sources
- Can AI Tell Us How Much to Pay for Art?
- Can AI Tell Us How Much to Pay for Art?
- New CIO survey shows worry that companies are overspending on AI capex
- Investors are starting to sour on their love affair with AI
- AI Rout Has Europe Looking to Old Economy IPOs for Revival
- LSEG looks undervalued after the AI selloff
- MindBio Builds Edge AI Hardware Platform for Voice-Based Intoxication Detection in Mining
- AI Losers Get Another Chance at Janus Henderson Sustainable Fund
- Analog Devices sees strong second-quarter as AI boom fuels chip sales
- Palo Alto shares sink 8%, CEO defends cybersecurity's position as AI hits software stocks
- AI giant Palantir moves its headquarters to Florida as tech company exodus continues
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