Japan's largest tech fund: AI stocks still have room to grow and are not in a bubble phase

Deep Tide TechFlow News: On November 7th, Japan’s largest technology fund stated that AI stocks are not in a bubble and still have room to grow. Yasuyuki Fukuda, Chief Investment Portfolio Manager of Nomura Asset Management’s Japan Information Electronics Stock Fund, said that the AI market is “just entering the second phase.”

During the recent AI boom, Nomura’s fund performed exceptionally well, with a total return of 49% as of November 6th, surpassing the US Nasdaq.

Fukuda noted that today’s IT stock market is completely different from the internet bubble 25 years ago. During the internet bubble, most investments in telecom network infrastructure were in startups that were not yet profitable or generating cash flow, making fundraising extremely difficult and leading to a market crash.

Today, the investors are giants like Meta, Google, and Amazon, which are cash-rich, creating a more sustainable infrastructure investment environment. He explained that investments in data centers and other cloud computing infrastructure are part of the “first phase” of AI growth. The next wave of growth will be driven by increased capital investment from traditional infrastructure companies such as telecom and utilities.