AEX price defies AI unrest on the last day of the week
The AEX price is turning light green today, while the world is in deep panic over the AI investment cycle. Will this ever turn out well?
While investors are increasingly concerned about the financing of the AI investment cycle, the AEX price simply knows how to rise on the last trading day of the week. For the time being, the entire market is not yet collapsing under the pressure that is increasingly being placed on the AI economy. That's a powerful signal.
For the time being, Thursday's blow will therefore not be followed up by the Dutch stock market index.
Investors should not forget, however, that it is quite possible that the AI bubble will deflate without bursting. It is quite possible that the expansion of the AI infrastructure will take place at a slower pace.
In that scenario, bond yields could fall and some of the pressure surrounding the financing of AI investments would be relieved. That does not necessarily mean the end of the bubble immediately.
Everything indicates that the demand for AI, computer chips, and computing power remains high. Many companies are already nearly fully booked for 2027. Consequently, there is no major problem on the demand side for the AI cycle.
The problem really lies with the financing aspect. Many doubts are currently arising regarding this, particularly concerning the smaller players—the so-called neo-clouds, which typically pay much higher interest rates than hyperscalers like Meta, Microsoft, and Alphabet to raise capital.
One man's death is another man's bread. That saying also applies somewhat to the situation we are currently seeing on the stock market. While investors are hesitant about AI, bond yields are falling slightly, allowing a large part of the market to catch its breath.
Everything outside the AI sector had a hard time for months with rising interest rates due to the huge demand for capital from the AI investment cycle. Now that that is no longer the case, these companies are given some breathing space again.
It is no coincidence that we see the AEX rising slightly today, while sentiment surrounding AI stocks is anything but good. This is yet another reminder that not everything on the stock market revolves around artificial intelligence.