A leading Wall Street firm says the powerful rally in the AI trade still has room to run to the upside, even as valuations surge.
In a new CNBC interview, Stacey Rasgon, senior US semiconductor analyst and managing director at Bernstein, says fears of a sudden stop in the AI boom may be overdone given recent earnings and forward guidance.
“The worry that people would have on all these is that the music stops, like the numbers have gotten so big so quickly that, I mean, you worry about sustainability, and that’s always been the big concern. But I think a lot of the things that we’ve seen over the last few weeks and months suggest that things can be sustainable for longer.”
The call highlights fresh signals from Broadcom (AVGO), which recently disclosed it had secured a major new AI customer for 2026 that Rasgon says appears to be OpenAI.
“We had Broadcom report earnings a few weeks ago, where they talked about a new major AI customer next year, looks like it’s OpenAI. And the CEO, Hock Tan—who’s like 73 years old, by the way — has agreed to stick around until 2030. And his retention incentives are all around AI revenues that get to some very big numbers by the end of the decade if he hits his targets, you know, as much as $120 billion.”
Nvidia (NVDA) also remains at the center of the trade, despite investor nerves around the scale of its pipeline deals.
“With Nvidia, we had the OpenAI investment, I guess, a few weeks ago, which actually gave people a little bit of pause at first. But at the same time, you know, the first tranche of that doesn’t even come until next year, which suggests that OpenAI is going to be buying from them for quite a while.”
Rasgon adds that forward demand signals remain overwhelming, with OpenAI spending forecasts and Oracle’s backlog numbers pointing to multi-year commitments.
“And then you start to see some of the numbers that OpenAI themselves are starting to throw out, and the Oracle RPO (remaining performance obligations) number that was just, I mean, hundreds of billions of dollars. It’s becoming increasingly clear, I think, that the party is still going, at least for now.”
Rasgon acknowledges risks, but says timing matters.
“And I’ve said for a long time, at some point, there will probably be an air pocket or something. I mean, it has to be, but it’s not now. It’s not this year. It doesn’t look like it’s next year. It may not be 2027. For now, I think these can still work.”
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