Neuberger Berman’s Managing Director Conrad Saldanha said the global AI investment cycle will remain strong through 2027 and potentially into 2028, nudging market watchers to keep an eye on the next wave of spend.
AI spending is projected to keep flowing into semiconductor makers, component suppliers, and broader tech firms, a trend that could keep the sector’s revenue growth momentum intact. Saldanha noted that the capex runway is solid, providing a cushion for chip makers and related vendors.
The commentary shifts focus to India’s private banking sector, which has been under pressure. Saldanha highlighted that tariff uncertainties easing could unlock value for banks, especially those with exposure to AI‑driven financial services.
Analysts compare this scenario to the past six months where bank stocks lagged behind tech and commodity plays. In that window, sector‑average returns fell 4–6%, while AI‑related indices gained 12–15%, widening the performance gap.
Looking ahead, Saldanha urged investors to filter AI plays by fundamentals, warning that valuations can outpace real contribution. He added that companies like Netweb and Dixon Technologies could benefit as AI adoption expands, but cautioned against chasing every AI‑linked name.
Market participants will likely revisit private bank valuations as the next quarter’s earnings season arrives, with guidance expected around mid‑2024. The sector’s outlook will hinge on the pace of AI‑enabled digital banking initiatives and regulatory clarity.
Investors should keep watch for any policy shifts that could alter the AI capex trajectory, as well as for bank earnings reports that might validate the sector’s upside potential.