The euphoria surrounding AI has given way to concerns about overheated valuations, which put pressure on stock prices this week. Nevertheless, Mark Dowding, chief investment officer of RBC BlueBay Asset Management, expects the strong momentum in tech profits to continue for the foreseeable future and investment spending to accelerate further.

“In light of this, it was notable that Google and Meta launched massive corporate bond offerings last week,” says Dowding. “These companies, which have served as money machines for years, are now at the forefront of capital deployment. This is fuelling the sentiment that the increasing supply of corporate bonds could limit a further spread rally, even if other risky assets continue to perform well.”

According to Dowding, the AI-related investment wave in the US will accelerate from around $75 billion in 2025 to $300 billion in 2026. “With an investment volume of this magnitude, it is obvious that GDP estimates for next year will be revised further upward,” Dowding said.

Read the latest updates from BlueBay CIO Mark Dowding