Global stocks linked to record AI investment rebounded on Monday, after a week of falls sparked by the failed share market listing of homegrown data centre group Firmus Technologies.
The wild swings in AI-linked companies’ valuations have dominated share market returns all year, as investors look to identify the big winners for 2027.
Analysis from Morgan Stanley, suggests $US1.6 trillion ($2.3 trillion) will be spent on AI infrastructure in 2027, with mega-cap tech hyperscaler businesses like Meta, Google, Microsoft and Amazon among the biggest investors.
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Beneath them sit groups of AI data centre, computer hardware and power businesses, all jockeying to earn a share of an expected $US1.6 trillion windfall in a single year.
Tomorrow’s winners
Morgan Stanley suggests the best bets to profit from the spending are in the computer chip, server, network, memory, and power supply sectors.
It names South-Korean computing hardware manufacturers Samsung and SK Hynix as in excellent positions to post soaring profits through 2027. Shares in the businesses are up 140 per cent and down 14.4 per cent respectively over the past year.
“Across sectors, we see many companies growing rapidly as they win business to bring on compute for hyperscalers and neoclouds, and are thus seeing rising revenue exposure to the AI infrastructure build,” said Morgan Stanley.
In total the US investment bank expects AI spending to account for 25 per cent of all sales growth on the S&P/500 in 2027 and 78 per cent of all profit growth.
Other winners the broker expects to benefit are the likes of computer chip manufacturers Broadcom, AMD, and Nvidia, alongside networking giants like Cisco or Arista Networks.
Neocloud uncertainty
The scramble to capture wealth from the AI boom has also led many mum-and-dad or retail investors to bet on so-called neocloud businesses such as Nasdaq-listed Coreweave, Nebius and IREN.
On Monday, shares in all jumped more than 3 per cent on Wall Street, but remain heavily down for 2026.
The mini-rebound saw investors shrug off worries the companies are at the centre of a bubble-like mania, after privately-held rival Firmus struggled to attract support from more-sophisticated professional investors.
British data centre hopeful Nscale, also took a hit on Monday after it was reported Microsoft had pulled out of a funding deal. The decision threatens to undermine the vision of Nscale’s Australian founder to list on Wall Street at a valuation up to $US35 billion.
Morgan Stanley says neoclouds planning to build and operate data centres are among the spenders contributing to the $US1.6 trillion investment.
But it warns that rising global bond yields mean profitable hyperscalers such as Microsoft or Meta are less risky bets than early-stage neoclouds, which must borrow to fund their ambitious plans.
“We continue to see capacity for the higher-rated hyperscalers to fund their investment plans, even at higher borrowing costs, while lower-rated borrowers are more exposed to financing constraints,” it said.
ASX winners
Elsewhere, Macquarie Group’s Equity Strategy team warned the US Federal Reserve’s September decision to lift interest rates means aggressive AI capex forecasts may need to be trimmed.
“Markets should start pricing the risk of weaker AI capex before central banks are ready to pivot to (rate) cuts later in 2027,” Macquarie said.
“The AI build has supported global growth and inflation despite higher energy costs, rising yields and rate hikes. If marginal capacity is no longer funded, the slowdown should spread through data-centre construction, power infrastructure, equipment and commodity demand.”
Macquarie’s equity strategists believe ASX investors should avoid the mania for debt-funded neoclouds and instead own profitable businesses, which benefit from falling bond yields.
For this slightly contrarian approach, it recommends buying healthcare, real estate, and infrastructure stocks.
Some of the names Macquarie mentions are toll road operator Transurban, real estate giant Goodman Group, and private hospital player Ramsay Healthcare.
