AI Still Top of Mind for Companies, Investors

Core Insights - Despite recent pullbacks in big-name growth stocks, particularly those linked to AI, the investment thesis for AI remains strong [1] - AI continues to be a high priority for companies and professional investors, as highlighted at the BlackRock 2026 Outlook Forum [2] Group 1: AI Demand and Market Dynamics - The discussion at the BlackRock forum emphasized the physical constraints in AI buildout, including compute, materials, and energy, with significant future power demand estimates for AI data centers and chips [3] - Concerns about the viability of AI spending and the potential bubble in valuations of AI-linked stocks are prevalent among investors [4] Group 2: Valuation Comparisons - The S&P 500 Technology Index currently trades at 42x earnings, which is high but lower than the 67x seen during the internet bubble 25 years ago, suggesting a more favorable valuation environment for AI investments [6] - Technology companies today exhibit better quality traits, with the S&P 500 Technology Index showing an average return on equity of 30%, compared to a long-term average of 20% [7]