{"id":280743,"date":"2026-01-12T11:22:09","date_gmt":"2026-01-12T11:22:09","guid":{"rendered":"https:\/\/www.europesays.com\/ie\/280743\/"},"modified":"2026-01-12T11:22:09","modified_gmt":"2026-01-12T11:22:09","slug":"a-metaverse-moment-could-rattle-the-ai-juggernauts-in-2026-the-irish-times","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/ie\/280743\/","title":{"rendered":"A \u2018metaverse moment\u2019 could rattle the AI juggernauts in 2026 \u2013 The Irish Times"},"content":{"rendered":"

Michael Cembalest of JPMorgan is not waving the bubble flag on AI<\/a>, but he is clear about one thing: when one theme has \u201csmothered\u201d the rest of the US equity market, it should be stress-tested.<\/p>\n

The numbers alone justify some unease. The market capitalisation of four hyperscalers (Microsoft, Alphabet, Amazon, and Meta) and the semiconductor ecosystem they depend on has surged from roughly $3 trillion to $18 trillion in a few years.<\/p>\n

Since ChatGPT<\/a>\u2019s launch in November 2022, says Cembalest, a group of just 42 AI-linked companies has generated an estimated 65-75 per cent of the S&P 500\u2019s returns, profits and capital spending. Strip them out, and US indices would have lagged Europe, Japan and even China.<\/p>\n

Tech capital spending alone has accounted for almost half of US GDP growth over the past three quarters, up from less than 5 per cent in the first three quarters of 2023.<\/p>\n

Cembalest\u2019s question is not whether AI is transformative, but whether the \u201clargest moat in market history\u201d is as \u201cindestructible\u201d as the market assumes. He highlights four medium-term risks. <\/p>\n

These include already straining US power generation, with data centres projected to drive two-thirds of load growth.<\/p>\n

There is the obvious risk from China, which is pouring subsidies into building a parallel semiconductor ecosystem. Geopolitical conflict involving China and Taiwan is another. The world remains hugely dependent on Taiwan for advanced chips, a concentration risk that dwarfs Europe\u2019s former reliance on Russian gas. <\/p>\n

The most immediate risk, however, is a potential \u201cmetaverse moment\u201d for hyperscalers. Since late 2022, the big four have spent $1.3 trillion on capex and R&D, much of it AI-related. Will profits materialise at scale? \u201cIf not, moat companies could face a version of the metaverse reckoning that took place in 2022\u201d, cautions Cembalest, when Meta\u2019s vast spending spooked investors, and \u201cthe Mag7 stocks fell in half.\u201d<\/p>\n

For what it\u2019s worth, Cembalest reckons stocks will rise again in 2026, but \u201cit\u2019s the right time to start focusing on these questions\u201d.<\/p>\n","protected":false},"excerpt":{"rendered":"Michael Cembalest of JPMorgan is not waving the bubble flag on AI, but he is clear about one…\n","protected":false},"author":2,"featured_media":280744,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[261],"tags":[291,289,290,297,381,18,19,17,380,82],"class_list":{"0":"post-280743","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-artificial-intelligence","8":"tag-ai","9":"tag-artificial-intelligence","10":"tag-artificialintelligence","11":"tag-chatgpt","12":"tag-china","13":"tag-eire","14":"tag-ie","15":"tag-ireland","16":"tag-taiwan","17":"tag-technology"},"share_on_mastodon":{"url":"https:\/\/pubeurope.com\/@ie\/115881872100106390","error":""},"_links":{"self":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts\/280743","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/comments?post=280743"}],"version-history":[{"count":0,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/posts\/280743\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/media\/280744"}],"wp:attachment":[{"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/media?parent=280743"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/categories?post=280743"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.europesays.com\/ie\/wp-json\/wp\/v2\/tags?post=280743"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}