A major asset manager says the AI trade is nowhere near exhausted, despite investors worrying that the sector’s explosive run may be losing air.
In a new Bloomberg Technology interview, Allspring Global Investments senior portfolio manager Margie Patel says investors who are cashing in on their AI gains may miss out on more profits.
She highlights that capital continues to rush toward AI-linked companies and data-infrastructure players, starving other sectors of investor attention.
“Well, I think really all the oxygen is being sucked out of other areas of the market and going into artificial intelligence, data storage, data centers, all the rest of that. And I think we’re still continuing on that trail.”
Patel rejects the idea that investors should trim high-flying AI winners solely on valuation strength, saying earnings momentum and sector investment justify staying invested.
“If the worst thing you can say about it is the price has gone up a lot, that doesn’t mean you ought to sell it here. We’re still somewhere in the middle of this huge wave of changing the whole economy, changing technology, and it’s really too soon to say stocks are too high, I’m going to bail out.”
She also notes that the biggest AI beneficiaries possess large cash flows and commitment to capital spending, underscoring the structural nature of the boom.
“All those companies have high cash flow to fund these activities. There’s no sign that they’re losing their enthusiasm to make investments to keep a leading edge in Nvidia.”
Looking closer at Nvidia, Patel says she sees NVDA as a solid long-term play.
“Well, it’s very hard to be negative on Nvidia unless you see some negative development in the company. And just because a stock has gone up and actually looking at my portfolio, I actually have some stocks that have actually outperformed Nvidia this year, gone up even more. So I would say that as long as the growth path looks pretty good for Nvidia, that it would be a worthwhile add.”
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