The surge in valuations worldwide has worried some market observers who argue that, while datacenter spending and construction is accelerating, AI services have yet to go mainstream and earn the revenues needed to justify the near-unprecedented rally.
It remains uncertain if there will be eventual demand for all the computing power now under construction. Any setback in earnings from mega tech firms may spark a selloff given their stretched valuations, as seen during the meltdown in April, according to JPMorgan Asset Management.
For now, though, investors see more upside for tech shares despite the lofty valuations.
“Tech stocks continue to defy gravity,” Peter Kim, managing director at KB Securities, said in a Bloomberg TV interview. “I don’t see significant headwinds against Asian tech, possibly extending into next year.”
