Susquehanna Analyst: Corporate AI investment follows the philosophy of "spend money first, ask about effectiveness later", the cycle may extend until 2027.

Susquehanna's senior stock research analyst Mehdi Hosseini pointed out that companies in the field of artificial intelligence investments are currently adopting a strategy of "spend first, ask about return on investment later," and this trend may last longer than previously expected. He stated in an interview that the discussion about the return on investment in large-scale artificial intelligence spending has been postponed to "some point in 2027" instead of his initial prediction of 2026. Unlike previous cycles dominated by distributors and original equipment manufacturers (OEMs), the current artificial intelligence boom is led by major tech companies such as NVIDIA Corporation (NVDA.US), AMD (AMD.US), and Broadcom Inc. (AVGO.US). Hosseini emphasized, "This explains why this cycle can last throughout 2025-2026, and possibly even until 2027, highlighting the unusually prolonged nature of the current market. The concentration of purchasing power among major artificial intelligence companies is creating unique market dynamics in the supply chain. When asked whether customer concentration would weaken the cycle's resilience, Hosseini argued that if NVIDIA Corporation is not penalized for customer concentration, then "Micron (MU.US) should not be penalized either, otherwise there will be downward risks to overall artificial intelligence spending." Regarding memory manufacturer Micron Technology, Inc., he specifically pointed out that its stock price has significant upside potential: "Investors have not fully realized that not only will supply remain tight, but the next generation of GPUs specifically designed for massive context processing - Rubin - will require more advanced DRAM, and Micron CEO Sanjay Mehrotra's gross margin is expected to rise to 55% or even close to 60%," and predicted that Micron's stock price could reach $200 per share. Although optimistic, Hosseini also acknowledges potential risks in the financing models of suppliers in the artificial intelligence field. He warned, "The financing model of suppliers is worrisome, and may have counterproductive effects to some extent," and compared it to similar patterns observed in the CECEP Solar Energy industry in 2008-2009. However, he also believes that any major recession has been postponed, and the essence is that "funds have been invested first, and the issue of return on investment is left to be resolved later."