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INVESTORS who have piled into chipmakers, data centres (DCs) and hyperscalers in the pursuit of gains from the artificial intelligence (AI) boom may not be aware of where the next wave of returns will come from
While AI remains a transformative force with the potential to reshape economies and industries, markets may have become overly concentrated in the most visible beneficiaries of the technology revolution, says French asset management group Amundi
Amundi, Europe’s largest asset manager with €2.4 trillion (RM11.3 trillion) under management, sees longer-term opportunities in the infrastructure underpinning AI’s expansion — electricity grids, copper, critical minerals, industrial automation and robotics — as well as companies that use the technology to improve productivity rather than those building the underlying large language models
“Overall, our view is that AI or tech is meaningful for society at large and companies … We are not saying it’s not important, but the value will not be where the market is thinking it will be,” Amundi group chief investment officer Vincent Mortier tells The Edge on the sidelines of the Amundi World Investment Forum 2026 in Paris
“It would be better to invest in the people who will adopt AI to transform themselves rather than in hyperscalers or chipmakers,” he says
Since the launch of the generative AI models in late 2022, a handful of technology companies — from semiconductor makers and cloud service providers to DC operators — have driven much of the gains in equities globally
The Magnificent Seven stocks (Tesla Inc, Nvidia Corp, Alphabet Inc, Amazon.com Inc, Apple Inc, Microsoft Corp and Meta Platforms Inc) accounted for a disproportionate share of the returns in US markets over the past two years, pushing valuations to levels that have prompted comparisons with previous periods of market exuberance
While Mortier sees signs of overheating in parts of the AI ecosystem, particularly among high-momentum tech stocks and DC investments, he stops short of calling the broader market rally a bubble
“When you look at all the metrics — technical metrics, flows, leveraged ETF (exchange-traded fund) flows, single-name flows — it’s exactly the behaviour of a bubble. So are we in a bubble in some companies? I think yes. But are we in a global bubble? No,” he says
Mortier points to the recent listing of aerospace and AI conglomerate SpaceX, with its sky-high valuation as a possible symbol of the market’s exuberance. “Maybe it will be the start of the mother of all bubbles, in a way … we’ll see. People will remember this day because it’s a very unique IPO.”
After touching a high of US$225.64 per share, SpaceX has pared most of its gains since listing on June 12. At the closing price of US$154.54 last Wednesday, the stock is up 14.5% from its initial public offering of US$135 per share.
Fuelled by optimism driven by AI, the broader tech-heavy Nasdaq has climbed 10% so far this year after a 21% gain in 2025.
Limits of the AI play
The question facing investors is no longer whether AI will change the world, but who will ultimately capture the economic value it creates. What remains uncertain is whether the companies leading today’s investment boom will generate sufficient returns to justify their valuations
Tech giants are collectively spending hundreds of billions of dollars on DCs, computing power and AI infrastructure, while markets continue to reward those investments in anticipation of substantial future earnings
“The market has been pretty optimistic, for good reasons in the short term, but on a hypothesis which, for me, is a bit questionable,” says Mortier
Consumers and businesses currently pay only a fraction of the true cost of AI services, as providers prioritise market share and user adoption over profitability, he notes. These companies will eventually have to raise prices at some point
“I’m not sure people will want to pay. I think the higher prices will lead to lower monetisation capabilities,” says Mortier
While the demand for AI chips is expected to remain strong, the increased competition could compress margins in an industry where investors are currently pricing in years of rapid growth, he adds
Mortier points to China, which has made semiconductor self-sufficiency a strategic priority. He says Chinese firms are investing heavily to develop advanced domestic chipmaking capabilities, raising the prospects of lower-cost alternatives entering the market far sooner than many investors expect
“Next year or the year after, we’ll probably have China coming up with super-precision, high-end chips [that are] much cheaper. That will totally modify the marketplace. And I’m talking about in one or two years, not in 10 years,” he adds
Such developments could have significant implications for semiconductor valuations, which have been buoyed by expectations of years of strong earnings growth
“When you buy into a chipmaker today at 20, 30 or 40 times earnings, it’s because you’re very confident it will grow for 10 years. Honestly, I wouldn’t be so sure. So I will be a bit cautious after the big market hype we had on chipmakers,” says Mortier
From AI builders to AI users
Monica Defend, Amundi chief strategist and head of the Amundi Investment Institute, argues that investors should increasingly look beyond the companies building AI models and infrastructure, and focus instead on the industries that stand to benefit from adopting the technology
While much of the market’s attention has centred on chipmakers, cloud providers and DC operators, the next phase of the AI investment story is likely to be driven by companies using the technology to improve productivity, automate processes and reduce costs, she says
“We have moved beyond the AI enablers. The midstream and downstream is where we think there is sectoral value,” Defend tells The Edge
In particular, she sees opportunities in industrial automation, where AI is increasingly being integrated into manufacturing processes, supply chains, logistics and factory operations
“As long as you start to automate industrial production in a vertical way, this will be the next wave. [The winners will be] the sectors that can successfully implement AI to make industrial processes more efficient and profitable,” says Defend
Strategic autonomy, reshoring and supply-chain resilience are also accelerating investments in automation technologies. “If this is the fil rouge (common thread), then you need to see at sector level where this is materialising,” she says
For years, global investors have largely allocated capital based on countries or regions, favouring markets such as the US because of their dominant tech sector
Defend argues that this approach is becoming less useful in a world where technological disruption cuts across borders. “We need to shift from macro-beta investment — I invest in Europe, I invest in Japan, I invest in China — to sector beta,” she says
Rather than asking which country will benefit most from AI, investors should identify the industries best positioned to capture the gains from automation, electrification and digitalisation, says Defend
That may also create opportunities beyond the US, where a handful of tech giants dominate stock market performance
“The US market is too deep, too big and too liquid to be ignored. But what we hear from our clients is a growing interest to diversify out of the US because it is a very concentrated market and it is expensive,” she says
Europe and Asia could stand to benefit from that shift, given their greater exposure to industrial companies, manufacturers and infrastructure providers that may be among the largest adopters of AI technologies, says Defend. “The industrial sector has a larger weight in Asia and in Europe when compared with the US,” she points out
Malaysia’s second wave of AI winners
On the local bourse, tech counters have rallied sharply over the past year. The Bursa Malaysia Technology Index has climbed about 30% year to date, outperforming the broader market as investors accumulate semiconductor and AI-linked stocks
The immediate beneficiaries of the rally include semiconductor equipment maker ViTrox Corp Bhd (KL:VITROX), advanced manufacturing solutions provider Mi Technovation Bhd (KL:MI) and newly listed chip designer SkyeChip Bhd (KL:SKYECHIP)
Beyond chipmakers, the market has begun looking for the next beneficiaries of AI spending, with companies linked to power infrastructure, utilities and water systems gaining attention. The rapid expansion of DCs requires not only computing power, but also electricity, water and transmission capacity
Infrastructure-related counters such as MN Holdings Bhd (KL:MNHLDG), CBH Engineering Holding Bhd (KL:CBHB) and Kee Ming Group Bhd (KL:KEEMING) have seen renewed investor interest, while water infrastructure providers like ISF Group Bhd (KL:ISF) are increasingly viewed as indirect beneficiaries of the rising demand for DC investments.
How geopolitics is reshaping the investment landscape
The interim agreement between the US and Iran that was signed on June 17 has raised hopes that the war that has disrupted energy markets and threatened one of the world’s most important shipping lanes over the past three months will finally come to an end. The two countries have agreed to a road map that will lead to a permanent agreement within 60 days of the initial deal
As negotiations continue, however, military activity and attacks have persisted, underscoring the fragility of the ceasefire and the uncertainty surrounding any lasting peace. For Anna Rosenberg, head of geopolitics at the Amundi Investment Institute, that uncertainty is precisely the point
“Even if we get a muddy deal, I think the underlying challenges mean that we’re not going to go back to how it was before,” she tells The Edge on the sidelines of the Amundi World Investment Forum 2026 in Paris, before the signing of the memorandum of understanding between the US and Iran
The implications for investors extend far beyond the war in Iran. The world is entering an era shaped by economic warfare, strategic autonomy, supply-chain rerouting and shifting alliances, where geopolitical disruptions are becoming a recurring feature of the investment landscape, Rosenberg argues
A new normal
The closure of the Strait of Hormuz earlier this year highlighted the fragility of global trade routes at a time when geopolitical tensions are increasingly shaping markets
Nearly one-third of the world’s seaborne oil shipments pass through the narrow waterway connecting the Persian Gulf to the Arabian Sea. Its disruption revived memories of earlier energy shocks, from the 1973 oil embargo to the supply disruptions that followed Russia’s invasion of Ukraine in 2022
Although oil exports have continued through alternative routes with adjustments made by shipping operators, Rosenberg believes investors may be underestimating the longer-term implications. “The political situation is going to continue being disruptive, and I don’t think we’ll see a full reopening for things to go back to how it was,” she says
At best, she expects a gradual reopening accompanied by periodic disruptions. Drone attacks, threats against shipping and regional tensions are likely to remain part of the picture even if a broader political agreement is reached, she adds
“This is part of the geopolitical new normal, and that is very much reflected in our expectations. We have been saying that the level of geopolitical risk would rise, that we were going to see more conflicts, more disruptions, and that a lot of the things that we have taken for granted are now [being] challenged,” says Rosenberg
From globalisation to rerouting
While the disruptions of recent years have fuelled predictions of deglobalisation, Rosenberg believes a different process is underway. In her view, trade is not disappearing so much as changing direction, with countries responding to geopolitical tensions by building new supply chains and forging new partnerships
“I’ve never believed that we are deglobalising because we are rerouting all the time. We’re still very much deeply interconnected,” she says
Since the Covid-19 pandemic, companies and governments have increasingly sought to diversify supply chains, reduce vulnerabilities and build redundancy into critical industries
The shift accelerated after Russia’s February 2022 invasion of Ukraine prompted Europe to rapidly cut its reliance on Russian energy. Similarly, shipping companies responded to attacks in the Red Sea by rerouting vessels around Africa’s Cape of Good Hope
“In this low-trust world, a lot of countries are trying to make up for the fractures by entering into new alliances and new deals,” says Rosenberg, pointing to recent trade agreements involving the European Union (EU), India, the UK and Mercosur (the South American economic bloc comprising Argentina, Boli
“It’s not about efficiency anymore. It’s about resilience and control,” she adds
Rise of economic warfare
The rivalry between the US and China remains the defining geopolitical force shaping the new environment
While tensions have eased from earlier peaks, Rosenberg argues that both powers are increasingly deploying economic tools that were once considered extraordinary. “We’re in a world of economic warfare,” she says
Sanctions, tariffs, export controls and restrictions on critical reft rather than temporary measures. And the trend extends well beyond Washington and Beijing
According to Rosenberg, the EU is developing its own defensive trade instruments, while countries around the world are reassessing dependencies in sectors ranging from semiconductors and rare earths to pharmaceuticals and energy
Navigating a multipolar world
Unlike the Cold War era, when alliances were relatively stable and more clearly defined, countries today are navigating a more fluid geopolitical landscape. Governments are increasingly balancing relationships with multiple powers, cooperating on specific interests while competing on others
“Multipolarity means frequently changing alliances,” says Rosenberg. As such, future partnerships are likely to be driven more by specific issues in areas such as trade, security, technology and energy than by traditional long-term alliances, she notes
For middle powers such as Malaysia, that may prove advantageous. Rosenberg declines to comment specifically on Malaysia, but says the most effective strategy for many countries is likely to involve maintaining relationships with multiple major powers rather than aligning too closely with any one side. “A strategy of neutrality and multi-alignment with many different players is probably the best geopolitical strategy for this kind of world,” she observes
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