August 17, 2026, (Inside AI) — Big investors are hunting for tomorrow's AI winners as capital expenditure anxiety fades. The latest earnings season shifted the AI investment story from whether Big Tech's spending spree will pay off to which companies will deliver long-term returns.
Results from Microsoft and Amazon reassured markets that demand remains robust for AI infrastructure. Cloud growth is accelerating, and capacity constraints persist.
The question for some of the world's biggest asset managers is which companies can sustain profit growth once those constraints ease. Many retain significant positions in semiconductor stocks even after a sector rout in July.
At the same time, they are adding exposure to hyperscalers, the biggest cloud service providers whose scale allows rapid AI infrastructure expansion. Wellington Management's Brian Barbetta said hyperscalers are being recognized as large beneficiaries of the AI paradigm shift.
"The hyperscalers are being recognised in this moment as companies that are likely to be very large beneficiaries of this AI paradigm shift," Brian Barbetta, co-head of the technology platform at Wellington Management
"They remain core holdings in our portfolios, and we've in fact increased our positioning in many of these companies recently."
Shares in the four biggest AI capex spenders all lagged a 75% surge in the Philadelphia Semiconductor Index. They also lagged a rally in Nvidia-backed CoreWeave, up around 50%, and Nebius, up over 200%. Known as neocloud providers, these companies rent computing power and have capitalized on elevated spot pricing for scarce AI capacity.
Janus Henderson's Richard Clode said hyperscalers are likely to benefit from their investments over time. He expects profits and cash flow to grow faster than incremental capex growth by later next year into 2028. Clode said Amazon was one of his fund's biggest overweight positions.
"Today's capex is tomorrow's sales," Richard Clode, portfolio manager at Janus Henderson's Bankers Investment Trust
A Reuters analysis estimates hyperscalers will generate about $340 billion more in annual operating cash flow in 2027 than in 2025, while capex is expected to rise by roughly $534 billion.
Capital Group's John Lamb said investors should view AI as an expanding ecosystem. Data centers typically take 12 to 18 months to move from construction to producing revenue. He noted the latest quarterly earnings show this inflection point.
"It's not about whether chips are better investments than hyperscalers. It's about having both in your portfolio," John Lamb, equity investment director at Capital Group
Clode says companies that control both computing capacity and the layers that help customers deploy AI efficiently will gain a competitive edge. He says Amazon, Microsoft and Google have more lasting advantages than neocloud providers because of scale and customer relationships.
Valuation compression and neocloud vulnerability #
Hyperscalers' valuations have compressed this year and remain below post-pandemic peaks. Microsoft trades at about 24.6 times forward earnings and Meta at 17.6.
BCA Research's Noah Weisenberger said neocloud providers could be vulnerable if new computing capacity comes online and pricing normalizes, given their heavier reliance on debt and high pricing. He recommends a long-hyperscalers, short-neoclouds trade.
Even for the winners, there are challenges. Swiss wealth manager LGF+ZEST CIO Alberto Conca estimates AI monetization needs a fivefold to thirteenfold increase to justify current spending plans.
Barbetta expects competition to narrow the field of AI winners as the market matures. Companies with the broadest technology portfolios, deepest customer relationships and greatest control over their own infrastructure are likely to pull ahead.
"There are absolutely going to be fewer winners in the future than there likely are players today," Brian Barbetta, co-head of the technology platform at Wellington Management