Columbia Threadneedle: Tech Stocks to Keep Rallying as AI Spending Accelerates

Tech stocks will keep rallying for at least two more quarters, according to analysts at Columbia Threadneedle Investments. The reason: AI infrastructure spending is accelerating and already exceeds the growth rate of the previous two years.

Why the rally won't end

Columbia Threadneedle portfolio manager Tiffany Wade believes the market still underestimates the scale of the infrastructure cycle set off by artificial intelligence. Companies, from the largest hyperscalers to industrial players, are raising capital expenditure on data centers, chips and energy faster than expected even a year ago.

Some context matters here: the Nasdaq technology index has gained more than 50% over the past year and a half, which has fueled fears of overheating. Wade disagrees. In her view, the current wave of investment is structural rather than speculative. It is backed by real multi-year contracts and committed budgets that will flow through financial results over the course of several quarters.

What sets this cycle apart is that AI spending is no longer the preserve of the biggest tech giants alone. Traditional companies in finance, healthcare and manufacturing are picking it up, and that is what should extend the investment wave.

What is driving the spending

Several factors explain why the pace of investment is outstripping analyst expectations:

• Building new data centers requires long-term orders for chips and equipment. The money is already committed and will flow into suppliers' revenues.
• The hyperscalers (Microsoft, Google, Amazon, Meta) have publicly locked in record CapEx budgets for AI infrastructure for 2025–2026.
• Energy infrastructure (transformers, cables, cooling systems) has become an investment category in its own right, with an acute shortage of capacity.
• Second-tier companies, including software vendors, system integrators and industrial players, are starting to catch up with the leaders, creating a second wave of spending.
• Government support programs in the US, Europe and Asia add subsidies and regulatory incentives.

Risks and pressure points

The growth story is not without clouds. The main risk is a gap between the scale of AI investment and the actual payoff: if corporate customers fail to find uses for the new tools with a clear ROI, spending will start to slow faster than optimists expect. Rising bond yields add further pressure, as they traditionally depress valuations of growth companies.

"AI infrastructure spending is accelerating beyond the pace of the last two years," —

Tiffany Wade, Columbia Threadneedle Investments.

Still, Wade is betting on the rally continuing. Her argument: companies that missed the first wave of AI infrastructure spending are now forced to catch up under pressure from competitors, which in itself supports steady demand and gives server, chip and enterprise software makers predictable revenue.

What this means

The AI infrastructure cycle has moved from a phase of hype to a phase of real capital construction. For investors, this means the growth momentum in the tech sector should last at least until early 2027. Those waiting for a correction before taking a position should remember that waiting has a cost of its own.

*Meta has been designated an extremist organization and is banned in Russia.