Peter Berezin, Chief Global Macro Strategist at BCA Research, argues AI remains transformative but the main risk is financial and about timing, as returns may arrive too slowly to justify current capital spending. The five largest hyperscalers are expected to spend over $1 trillion next year, while the industry may need roughly $10 trillion in annual revenue to monetise the investment, based on his assumptions. He warns that chipmakers booking sales upfront while hyperscalers capitalise and depreciate their spending could obscure mounting pressure on returns. Berezin sees the equity bull market as mature rather than over, expecting consolidation before a bigger risk in 2028, when the Nasdaq could fall around 50%, while a 2027 US recession looks unlikely. He doubts China can offset a US slowdown, stays neutral on equities and bonds near term, and remains structurally bullish on gold.
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Original headline: AI Investment boom raises cross - asset risks as capex cycle matures , says BCA research strategist
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| Market | US stocks |
|---|---|
| Sector | Information Technology |
| Industry | Semiconductors |
| Market cap | $5.2T |
| Close on 10/16/2026 | 214.14 |
| Change that session | -1.42% |
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- AI Investment boom raises cross - asset risks as capex cycle matures , says BCA research strategist
Peter Berezin, Chief Global Macro Strategist at BCA Research, says AI can remain transformative but could trigger a significant market correction if productivity gains fail to keep pace with investment. He argues the core risk is financial and about timing, as returns may arrive too slowly to justify current capital spending, with the five largest hyperscalers expected to spend more than $1 trillion next year. Berezin believes the equity bull market is mature rather than over, expecting consolidation and volatility before a more material downturn; a US recession in 2027 looks unlikely, but 2028 poses a bigger risk, potentially with a Nasdaq drawdown of around 50%. He sees China unlikely to offset a US slowdown and remains neutral on equities and bonds in the near term.
- AI Investment boom raises cross - asset risks as capex cycle matures , says BCA research strategist
Peter Berezin of BCA Research says AI can remain transformative but could trigger a significant market correction if productivity gains fail to keep pace with investment. The core risk is financial and about timing, as returns from AI adoption may arrive too slowly to justify current capex. The five largest hyperscalers are expected to spend over $1 trillion next year, and the broader AI industry could need roughly $10 trillion in annual revenue to monetize projected investment, based on his assumptions. He views the equity bull market as mature rather than over, expecting consolidation before a bigger downturn, with 2028 posing a greater risk and a possible Nasdaq drawdown of around 50%. He remains neutral on equities and bonds near term, while real yields near 3% already offer attractive carry.
- AI Investment boom raises cross - asset risks as capex cycle matures , says BCA research strategist
BCA Research's Peter Berezin sees AI as transformative but warns of a major market correction if productivity gains lag investment, with the core risk being financial and timing-related. The five largest hyperscalers are expected to spend over $1 trillion next year, while the industry may need about $10 trillion in annual revenue to justify the outlay. He says the equity bull market is mature rather than over, with a possible Nasdaq drawdown of around 50% in 2028, a bigger risk than 2027. He doubts China can offset a US slowdown and is neutral on equities and bonds near term, but expects to become more constructive on US duration, as real yields near 3% already offer attractive carry. He favors industrial metals over oil long term and remains bullish on gold.
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