JIL's Take on AI

AI commands the spotlight in 2026 equity markets, and the capital deployment numbers are staggering. Goldman Sachs places hyperscaler AI capex consensus at $527 billion for 2026, with upside scenarios reaching $700 billion.

Fidelity's thematic team has designated AI the 'defining theme' of the year. Goldman Sachs is constructive on equities broadly, though Alphabet CEO Sundar Pichai has sounded a more cautious note on near-term AI monetisation timelines.

The Magnificent Seven represent the dominant concentration risk in any index-tracking equity portfolio. A rotation — even a modest one — out of these names would register as a meaningful drawdown in market-cap-weighted benchmarks, regardless of what happens in the rest of the market.

For SGC clients: we continue to favour cash-flow positive AI infrastructure names over pre-revenue AI application plays. The infrastructure layer — semiconductors, power, data centres, networking — has more durable earnings visibility than the application layer, which remains subject to rapid competitive displacement.