Nigel Green, CEO of deVere Group, one of the world’s largest independent financial advisory organisations, warns AI investors must adopt three key priorities for the rest of 2026. This counsel comes as the AI rally splinters, with sharp swings revealing which parts of the trade are built on real demand versus those reliant on financing. Global AI investment is projected to exceed $2.5 trillion by 2026, yet a significant disconnect exists between $400 billion in infrastructure spending and just $100 billion in enterprise AI revenue. A Bank of America survey found 45% of fund managers flag an AI bubble as the market’s greatest tail risk, up from 11% just months prior, with over half believing AI stocks are already in bubble territory.
Recent market movements vividly underscore this shift. Asian equities slipped, and the S&P 500 pulled back from a record high, even as Nvidia advanced. Notably, SpaceX tumbled 14% despite strong earnings, ahead of a $101 billion share unlock. This pattern of robust results triggering sharp share price falls has recurred, demonstrating altered investor sentiment. Nvidia’s shares dropped 5% after reports of a potential $250 billion payment guarantee for OpenAI’s data centre lease. SK Hynix, despite record quarterly revenue surging 257% year-on-year, fell 9% post-earnings. Mr Green states investors need to stop treating the AI trade as settled and apply real scrutiny.
Mr Green outlined three critical priorities. Firstly, investors must differentiate within the sector, distinguishing companies with genuine demand for physical components, like Micron, Applied Materials, and Cisco (which raised its 2026 revenue guidance to $62.8-$63.0 billion on solid AI data-centre orders), from those increasingly reliant on complex financing. Secondly, scrutinise balance sheets, not merely growth stories; pressured stocks often carry substantial financing entanglements. Thirdly, expect significant volatility around each earnings date. With the price-to-earnings ratio above 40, events like SpaceX’s 14% swing on strong earnings highlight how financing can easily overwhelm fundamentals. Investors need to size positions accordingly; waiting for market calm is not a realistic strategy.
