Model portfolio – future: When it comes to AI stocks, differentiation is now important

The midterms have once again highlighted investors' AI concerns. What is crucial, however, is which corporations maintain their market position and profitability.

Frankfurt. Time and again, there are significant capital outflows from American tech stocks as a result of AI concerns. This was also the case last week, when the Democrats took back the House of Representatives and Senate in the midterms. Investors fear stricter regulation, higher requirements for artificial intelligence (AI) and a clear damper on the investment boom in data centers.

Prices have now recovered significantly: The Nasdaq 100 tech index closed on Wednesday evening with a weekly gain of more than six percent. On Thursday he gave up only a few points after the resignation of Nvidia boss Jensen Huang.

Regardless, in our view, the political situation is not the decisive factor for the price development of tech stocks. Much more important is the question of which companies can maintain their market position and profitability even under changing conditions. This is precisely why we began to take a more differentiated look at the risks within the AI ​​value chain at an early stage.

At the end of last year we pointed out possible exaggerations in the data center and infrastructure segment here in the Future Depot. Accordingly, we have reduced our exposure to particularly cyclical parts of the AI ​​value chain, including AMD.

The market is now increasingly discussing whether the massive investments in data centers can keep pace with the actual economic use of AI in the long term. If the monetization of many applications is slower than expected, providers of AI accelerators and high-performance storage would be particularly affected.

This does not mean that we question the long-term importance of artificial intelligence. We continue to look closely. The focus is increasingly shifting from the infrastructure to the specific applications.

We previously expanded positions in the healthcare sector. There, AI can significantly accelerate research, diagnostics and drug development. One example is Tempus AI, which makes extensive medical data sets usable for specific clinical applications, such as personalized cancer treatment.

We are also broadly invested in the sector through Lonza, Sartorius, Thermo Fisher, Telix, Basilea, Armata, Charles River and Roche, among others. Especially in a phase in which many investors are looking for alternatives to classic AI infrastructure stocks, we have already seized attractive opportunities here.

At the same time, we took advantage of the weakness in the software sector. Companies like ServiceNow, SAP and Veeva, which offer Software as a Service (SaaS) in the life sciences sector, benefit from AI-related productivity increases without having to invest billions of dollars in data center capacity themselves.

We also find one area particularly exciting that is largely independent of the midterms: uranium and nuclear energy. The renaissance of nuclear power is gaining momentum worldwide. At the same time, electricity demand is increasing significantly due to electrification, digitalization and AI applications. Many energy suppliers have not yet adequately secured their future uranium needs. That is why we have built up positions such as Cameco, the second largest producer of uranium in the world, and continue to see significant potential here.

We also recently entered the payment service providers Paypal and Adyen in a countercyclical manner. In our view, both companies remain attractive beneficiaries of the long-term trend towards digital payment transactions.

Of course, some of our positions remain at the center of the current AI discussion. These include Alphabet, Nvidia, ASML and TSMC. However, it is crucial to take a differentiated look at the opportunities and risks within the value chain.

Our core insight remains unchanged: artificial intelligence, digitalization of healthcare, electrification and increasing global energy demand are intact trends. Political events can cause short-term volatility. In the long term, however, factors such as innovative strength, competitive advantages and profitability determine investment success.