While some individual stocks may look expensive, today’s market looks very different from 2000. Back then, valuations were extreme and enthusiasm was widespread. Today, there is still healthy debate around spending, profits and valuation, which suggests a more measured environment.
We don’t invest in AI as a single theme. Instead, we focus on individual companies with strong balance sheets, clear revenue models and the ability to generate real profits and cash flow.
In practice, that means favouring established businesses already benefiting from AI demand today. For example, companies such as NVIDIA and Taiwan Semiconductor Manufacturing sit at the heart of the AI supply chain, supplying the chips needed to power AI systems. Others, including Microsoft, Alphabet and Amazon, are investing heavily in AI but are doing so from a position of financial strength, using existing cash flows rather than relying on external funding.
Diversification is also critical. Bankers invests across regions and sectors, including companies that benefit from AI outside the technology sector. We see AI creating opportunities in areas such as financials, where well‑capitalised banks like JPMorgan Chase can use AI to improve productivity and efficiency while operating in a highly regulated environment. This broader exposure helps reduce reliance on any single technology or outcome.
AI is likely to be the defining technology wave of the coming years, much like the internet was over the past two decades. That creates both risks and opportunities.
Our role as long‑term stewards of capital is to stay disciplined, focusing on fundamentals rather than headlines, and to identify businesses that can genuinely turn this technology into sustainable profits. That approach has served investors well through previous periods of major change.
