Jefferies signals AI investment could peak, India allocation now 14%
Jefferies is signaling that the big wave of global AI investments could be hitting a peak or taking a breather. It's worried about rising costs and whether all this spending will actually pay off.
Interestingly, even with these concerns, Jefferies just bumped up its investment in India to 14% of its Asia-Pacific (excluding Japan) portfolio, clearly betting on India as the next big thing.
Jefferies sees capex up, funding cools
The report also points out that excitement for funding new AI projects is cooling off, even though the four major hyperscalers, Microsoft, Amazon, Alphabet and Meta, increased their combined capital expenditure by 108% year-on-year to $202 billion in the third quarter of 2026.
Jefferies warns that if costs keep climbing, we might see less money going into AI in 2027, something that could slow down US economic growth.
It's now suggesting investors look beyond classic tech and consider areas like healthcare and biotech, while dialing back on South Korea and Taiwan to focus more on India's growing role.