The AI trade is now ‘too pervasive’ for investors to sit out: Moneta Group

We've had existential crisis come and go in this field and resilience continues to be the order of the day. So I'd say we're not at the crossroads yet. We have the euphoria that will power us through this current anthropic offering. But I do believe once the election's over and some chips have fallen in that respect, we will have a reckoning at that stage. If I'm so there's clearly a fair bit of wood to chop and especially if you consider the AI debt financing concerns that the credit markets seem to be signaling. So where should we be in the AI stack in this narrative or should we sit this one out look elsewhere diversify our portfolios and if so where should that rotation take us? Unfortunately, I think the opportunity to sit this one out has definitely sailed in the respect there would be even career risk for any investor certainly a professional investor who is opting out of the arrived a AI trade at this point. It is so pervasive across every sector every market in the globe there there is no sitting this out. However, there are different ways to play it across the value chain across the private and the public domain getting into the value chain say around infrastructure components provision. I'm particularly bullish on the health care segment that came out also out of the anthropic S1. The potential for AI to disrupt and really propel health care into a new age of discovery that has huge potential that can be played not only through the AI stocks but also the healthcare sector. So no sitting it out but it's a question of taking profits and diversifying. >> Ephen, I also wanted to ask you about your outlook with regards to the rate rate market. Now, we've seen a rise in sovereign bonds because of some of the fiscal concerns in various governments and their ability to finance that. But there's also the argument that despite higher rates at the moment, the corporate bond space at least, especially in the AI tech space, is a safe place to go because you're seeing that the cash flows and the earnings at least will support future buildouts, meaning that these bonds are good. Is it fair to say that maybe there's more opportunity in the corporate bond space versus some of the risks that we're seeing mounting in the sovereign space? Or is it not as simple as that? as it's I suppose it's quite of a complex area. We see the corporate bonds as having strong spreads now and that really reflects I think some of the skepticism that the bond market has had around the AI trade or at least its complexity that has been the only part of the market that has shown any skepticism as the equity market has generally been propelled by positive momentum. So those kind of yields are very attractive. We can't ignore inflation. It's still a factor. It's still going to ultimately erode any the bond yield return but it is it's it's not as high as it has been. So those real yields are still meaningful. So I'd say corporate bonds yes in the cashrich hyperscalers good place to be. Obviously steer carefully when it comes to the neoclouds and the likes of coreweave those business models come come under pressure. As to whether I'm concerned about sovereign yields not really is the answer. I think we've reached somewhat of a critical turning point in terms of those yields. We've seen that in the US. We've seen those US government bonds be seen as a a risk off hedge and essentially a flight to safety and similarly in Europe we have had some kind of a leveling off. So I don't believe we're at this kind of fiscal budget Armageddon moment. Um even in France which has seen the most particular sell-off. Similarly you mentioned the UK a new budget there a seventh prime minister in 10 years but yet those yields have reached some kind of a ceiling. So I suggest yes that's still a place to be. It's not a place to make real money,