AI stock valuations may have peaked. Trivariate Research thinks these shares can keep working
Revenue growth could more than offset anticipated contractions in stock multiples for some key AI stocks over the next few years
TL;DR
- AI stock multiples are likely to decline due to rising interest rates and potential policy changes.
- Higher interest rates can negatively impact AI companies with significant debt.
- Political pushback, including potential data center construction bans and concerns about job losses, could lead to further regulation of AI.
- Despite potential valuation contractions, revenue growth in AI stocks may compensate for declining multiples.
- Trivariate Research identifies Iren, Nebius, CoreWeave, AMD, Marvell Technology, and Oracle as AI stocks with strong revenue expansion potential.
- Near-term optimism for AI stocks remains due to continued upward earnings revisions.