AI Revolution in Early Stages: Horizon Investments CIO

Market Valuation and Growth - The market is seeing phenomenal valuations, including a new $4 trillion company and a $400 billion private valuation for SpaceX [1] - Current valuations are sustainable because companies are growing into them, unlike the dot-com bubble of the 1990s [2] - Tech companies' valuations are in the thirties, a sustainable metric [3] - Continued growth and upward pressure on metrics are expected, driven by early expansion, additional profitability, and better execution [5][6] Artificial Intelligence (AI) and Future Investment - The industry is still in the early stages of the AI revolution, with expectations for continued growth [6] - The focus will broaden from infrastructure to users of AI technology, with healthcare being a key area of interest [13][14] - The shift from makers to users of AI is expected to be a significant investment theme in late 2025 to early 2026 [12] - Identifying companies and sectors that can effectively use AI to increase profit margins and productivity is crucial [12] Tariffs and Market Resilience - The market is becoming numb to tariff anxieties, with diminishing returns in terms of shock absorption [8][9] - The market anticipates a playbook of tough talk followed by a deal acceptable to all parties, sustaining current levels [9] - Despite tariff concerns and deep sea worries, there is a perception that there is no real alternative to NVIDIA, contributing to recaptured all-time high valuations [7][10] Investment Strategy - Investment strategies involve broadening the portfolio and increasing overall allocation, while taking some out of infrastructure plays and prior winners [17] - Sectors like industrials, utilities, and staples may see reduced allocation to increase breadth in the portfolio [17]