US TECH AND GLOBAL STOCKMARKETS

12.02.2026 The US stock market is not currently exhibiting the features of a classic bubble like the .com episode of the late 90s. However, plans by the US tech companies to invest around USD 600 bn in new infrastructure this year warrant caution. Below I take a look at the implications.

In their latest updates to investors the big 5 US technology firms unveiled plans to invest around USD 600 bn in the new infrastructure and Artificial Intelligence (AI) development this year. This was up from around USD 400 bn in 2025. So far investors have been comfortable with the ability of the big tech firms to grow company-wide profits and have demanded little information on the profitability, or otherwise, of the AI investments. However, given the sheer scale of the investments being made this seems likely to change this year. The key question is whether current users can be converted into commercial paying customers that will allow the tech companies to make a sufficiently attractive margin to justify their vast investments in AI infrastructure. As AI models use a lot of electricity costs seem likely to remain elevated.

Given the enthusiasm of investors for all things related to Artificial Intelligence even slightly disappointing news about AI adoption and its associated profitability could trigger a sharp correction in the US stock market. This is because cash levels in investor portfolios are extremely low and would not provide much support for stock markets in a sell-off.

So, a strategy of being diversified across global stock markets and not overly focused on the US market seems sensible. Additionally, the types of investment styles a portfolio is exposed to should encompass dividend paying income shares as well as more growth focused technology shares. Stock markets outside the US and dividend paying shares are less highly valued than the technology heavy US stock market. 

For information only. Investors should seek professional advice for their own circumstances before making an investment.

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This post was written by Robin