tech
Dan Niles says he's backing away from hyperscalers, trimming chip stocks
'I kind of see a speed bump coming,' the investor said.
TL;DR
- Dan Niles is reducing his investment in 'Magnificent Seven' companies and chip stocks.
- High costs associated with artificial intelligence infrastructure are a concern for hyperscalers.
- Investors worry about hyperscalers' return on investment for AI infrastructure spending.
- A perceived shift to token minimization from token maximization could reduce AI usage and hurt hyperscaler revenues.
- Niles sees a 'speed bump' coming for AI-related revenues.
- Despite potential for chip stocks to benefit from AI spending, Niles is trimming exposure due to substantial gains.