As expectations spread through the market that the pace of growth in major US tech companies' AI investment will slow in the future, the profit-growth expectations supporting Japan's pick-and-shovel stocks are beginning to fade.
The market is beginning to price in expectations that the pace of growth in major US tech companies' AI investment will slow in the future, undermining the narrative supporting share-price gains among stocks that have depended on AI-related investment.
Recognition is spreading that the narrative supporting pick-and-shovel stocks is fading and that the factors underpinning their share-price gains are being reassessed.
Okamoto Ikuto (岡本郁翔), a dealer at Sanwa Securities, said, "The largest loss on record has occurred. The poor market conditions for AI-related stocks may not be attributable solely to deteriorating supply and demand." This suggests that worsening conditions for AI-related stocks could affect the earnings outlook for individual companies.