AI spending. AI bubble. AI arms race. We hear about the AI trade every day, but here’s what the pros are actually saying about it.

Bank of America’s latest global fund manager survey struck a mixed tone. While sentiment on earnings is the strongest it’s been in nearly four years, cracks are starting to show:

• 35% of managers say companies are overspending on capital expenditure, the highest reading in more than two decades
• 25% flagged an AI-driven asset bubble as the biggest potential tail risk
• 30% see heavy AI spending by mega-cap tech as a possible trigger for future credit stress

With those worries in mind, BofA says pro investors are trimming positions in tech and cutting exposure to the US dollar, while adding to energy, materials, and defensive consumer names.

The rotation goes global

The shift isn’t just sectoral—it’s geographic.

With US equities trading at roughly a 40% premium to global peers, investors are increasingly looking overseas. Flows into European and emerging markets are now at their strongest levels since early 2021.

In Europe, the appeal is largely valuation-driven. Robert Lancastle of boutique fund manager J O Hambro notes that much of the S&P 500 outside the mega-cap tech cohort offers no clear growth edge over European firms, yet still commands materially higher earnings multiples. Meanwhile, Europe’s economic backdrop is beginning to show incremental improvement.

Discovery Capital Management founder Rob Citrone says emerging markets offer a different edge: many firms in those countries are monopolies or oligopolies with pricing power and limited competition, meaning they don’t have to splurge on AI to stay ahead.

Asia is seeing particularly strong demand. Hedge funds recorded their largest net purchases of Asian equities in nearly a decade last week, according to Goldman Sachs data, with enthusiasm centered on companies tied to AI infrastructure.

So… how big is the tab?

Together, Alphabet, Microsoft, Meta, and Amazon are on track to pour nearly $700 billion into AI infrastructure this year, a more than 60% jump from the already record-setting levels seen in 2025.

As investors get jittery about AI spending and the tech selloff continues, Amazon stands out: Analysts project negative free cash flow anywhere from $17 billion to $28 billion in 2026 due to its massive capex plans. Maybe it’s no coincidence that the stock just logged its worst slide since 2006, shedding $450 billion in market value through nine straight days of losses.

For now, the buildout continues. But as the bill gets bigger, investors may want to shop around.—SY

🟢 What’s up

• Warner Bros. Discovery rose 2.72% and Paramount jumped 4.94% after Netflix granted WBD a seven-day waiver to reopen deal talks tied to the Paramount-Skydance transaction.
• eToro gained 20.43% following a strong Q4, with total trades up 55% despite a 50% drop in January crypto activity.
• Bayer moved up 6.55% after its Monsanto unit proposed a US class settlement of up to $7.25 billion to resolve current and future claims linking Roundup to non-Hodgkin lymphoma.
• Southwest Airlines climbed 6.16% on a UBS upgrade, citing potential revenue boosts of up to $3.2 billion by 2027 from assigned seating, extra legroom, and checked-bag fees.
• ZIM Integrated Shipping Services surged 25.45% after agreeing to a $4.2 billion takeover by Hapag-Lloyd, a deal that would create the world’s fifth-largest container carrier.
• Masimo rallied 34.22% after Danaher Corporation agreed to acquire the company for $9.9 billion in cash to expand its diagnostics and telehealth footprint.
• Infleqtion surged 13.18% in its NYSE debut after completing a SPAC merger that valued the quantum tech firm at $1.8 billion before new investment.

What’s down

• Snap fell 2.07% after unveiling a new creator subscription feature.
• Genuine Parts slipped 14.56% after announcing plans to split its automotive and industrial businesses into two separate public companies.
• Gemini Space Station dropped 12.9% following the departure of its COO, CFO, and CLO, alongside a wider-than-expected fiscal 2025 EBITDA loss forecast.
• ServiceNow edged down 1.09% despite CEO William McDermott’s planned $3 million stock purchase and the cancellation of executive trading plans.
• General Mills declined 6.98% after cutting its full-year sales and profit outlook, citing weak consumer sentiment and heightened volatility.

As AI hype propelled stock valuations higher over the last few years, investors have been forced to search further and further afield for new winners of the AI trade. First, it was semiconductor manufacturers; then it was energy stocks powering the data center buildout; and last year it was data storage companies.

The latest winner of the AI trade is Raspberry Pi Holdings, a small company that makes small computers—literally, single-board computers the size of your palm that cost $45. Nothing has changed for the company itself, which builds the computers for hobbyists and educational purposes. Instead, Raspberry Pi has been caught in the AI hype cycle after social media users realized that its products can be used to power OpenClaw.

For those not in the know, OpenClaw (previously Clawdbot, then Moltbot) is the hottest new AI agent on the web, capable of autonomously running your inbox, calendar, and entire life through your computer. In fact, such is the scale of excitement that OpenClaw’s founder was just hired by OpenAI. But security concerns have made users wary of running OpenClaw on their own devices, making a cheap alternative like Raspberry Pi the perfect workaround. That hypothesis is why shares soared 50% today.

It’s great news for Raspberry Pi, which had recently tumbled below its June 2024 IPO price thanks to fears that the rising cost of memory chips would cut into its business—the company has already hiked its prices two times in three months, according to Bloomberg. Today’s pop gives management some breathing room, and it gives investors a new AI winner to drool over.—MR

From capital strategy to scaling fintech for a new generation of investors, Sruthi Lanka knows what it takes to build financial platforms that last. At Eyes on Her, she’ll share how leaders are navigating volatility, technology, and long-term value creation in an evolving investing landscape. Grab a ticket and join us!

If you had an activist investing comeback on your 2026 bingo card, you’re a winner.

As a refresher, activist investment firms make money by buying shares of a company, then using their power to pressure the board of directors to enact corporate restructuring and other changes they believe will result in a turnaround.

But this year, activist investors are not only ramping up the number of companies they’re taking stakes in, but ratcheting up the severity of their tactics, too.

Take a look at all the activists making moves this week:

• Starboard Value is planning to nominate a majority slate on Tripadvisor’s board, the WSJ reported today. The firm has a roughly 9% stake in Tripadvisor, and has called for changes such as selling its restaurant reservation platform TheFork, and even going so far as to suggest it sell itself. Tripadvisor rose 9.68% today on the news.
• Jana Partners has bought a stake in fintech service provider Fiserv, according to the WSJ. The investor is pressuring Fiserv to focus more on its core banking business, which it's hoping will get a boost from increased spending in the banking sector. Fiserv rose 6.89% today.
• Elliott Investment Management has built an over 10% stake in Norwegian Cruise Line, and outlined a plan to improve its financial performance and woo guests. In a letter to Norwegian, Elliott said its share price could reach $56 per share if its suggestions were implemented—and is willing to take the fight directly to shareholders if they aren’t. Norwegian rose 12.01%.

Activist investors M&A

Part of the reason that activists are so active right now is because dealmaking is heating up, which means it’s not only faster and easier, but also more lucrative for activist investors to push a company into breaking up or selling itself, according to Reuters.

In the second half of 2025, over half of all activist campaigns were specifically pressuring companies to sell, up from only 35% of campaigns that demanded M&A in the first half of 2025, according to Barclays data.

The results are nothing to scoff at, either: Last year, activist investors launched a record 255 campaigns around the world, leading to 32 CEO resignations, while corporate raiders won 120 board seats.

Good luck, Tripadvisor, Fiserv, and Norwegian. You’ll need it.—LB

• UnitedHealth CEO Stephen Hemsley made private side bets on several healthcare startups, including some competitors.
• Eric Trump is investing in an Israeli drone maker that promotes its products as “low cost-per-kill.”
• CEOs of major Wall Street banks saw their paychecks soar by a combined $45 million in 2025.
• Companies are spiking prices after months of trying to ward off tariff costs.
• The AI race is going global: Alibaba just released its latest AI model, Qwen3.5.
• US Defense Secretary Pete Hegseth is “close” to cutting ties with Anthropic and punishing the company for not allowing Claude to spy on Americans.

Economic reports: We’ve got a delayed look at housing starts and building permits, and we’ll get a peek at the minutes from the last FOMC meeting in January to learn more about how central bankers are feeling

Earnings announcements: Analog Devices, Booking.com, CRH, Glencore, BAE, Carvana, Occidental Petroleum, DoorDash, Moody's, eBay, Garmin, Global Payments, Figma, Cheesecake Factory, and Wingstop

Everything else: Meta Platforms CEO Mark Zuckerberg is expected to take the stand in a trial focused on the mental health effects of social media on teen users. If his company loses and platforms like Facebook and Instagram are forced to weed out younger users, it could be a serious blow to the bottom line: Harvard says minors helped social media companies make $11 billion last year alone in advertising revenue.