Wolfe Research warns: Investors may overestimate the growth prospects of AI investments

BlockBeats News, February 25 — Wolfe Research warns that investors may be overestimating the growth prospects of AI investments, even as the market remains volatile. Recent trading shows that headlines alone can drive declines of about 1%–1.6% in the S&P 500, Nasdaq 100, and Russell 2000 indices.

Wolfe Research analyst Chris Senyek points out that although hyperscale cloud providers are expected to exceed capital expenditure estimates in 2025, it remains uncertain whether they can sustain this pace in 2026. Bottlenecks such as power, raw materials, and regulation could slow down large-scale AI infrastructure development in the second half of 2026.

If the growth rate of spending slows, it could benefit industries previously pressured by AI concerns, but it would also significantly impact stocks highly dependent on AI investments, such as semiconductors and industrial sectors.