HSBC Asset Management examines a broader but more selective equity cycle as AI spending spreads beyond mega cap leaders and emerging markets gain relevance. US hyperscaler capex could exceed $1 trillion by 2027, while emerging equities remain roughly 40% cheaper than the S&P 500 on forward earnings.
Equity Insights: The Next Phase of Broadening
HSBC Asset Management
Pierin Menzli
Research
16 Pages
Key Takeaways
Hyperscaler capex scales: US hyperscaler spending is expected to exceed $1 trillion by 2027, while data center revenues generate about 90% of growth at leading AI chipmakers.
AI adoption widens: Quantifiable AI benefits are now discussed by roughly 25% of S&P 500 companies, up from about 4% in 2023.
EM valuations diverge: Emerging equities rose about 13% year to date yet became roughly 30% cheaper on forward earnings as upgrades outpaced prices.
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