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Investing.com -- Macquarie pushed back against growing investor fears of an AI bubble, arguing in a note on Wednesday that the sector is being driven by real economic returns and severe supply constraints rather than speculation.
Analyst Arthur Lai said concerns are “overdone,” noting that many investors “overlook the positive economic returns from AI investment.”
Lai pointed to IBM’s disclosure that AI enabled “US$4.5bn in cost savings over the past two years” as evidence that the technology is already delivering tangible benefits.
Macquarie argued that the current wave of spending represents “a necessary, capital-intensive build-out of a new, foundational technology layer,” rather than a frenzy detached from fundamentals.
The bank believes demand is being fuelled by “proven economic utility and the need for global businesses to automate and innovate at scale.”
The clearest sign that this is not a bubble, according to Macquarie, is that supply remains the constraint.
“A bubble bursts when there is too much supply chasing too little demand. In AI, we have the opposite,” the analysts wrote.
Their recent checks show continued shortages in AI chips, high-end memory and data centre capacity, adding that “continuous upgrading drives up the value of hardware leaders.”
Macquarie also highlighted the “edge-cloud synergy,” where the rise of edge computing is accelerating cloud usage because the cloud remains the hub for model training and centralised data. It added that speculative manias “rarely require the immediate, capital-intensive physical infrastructure investment we see today.”
Looking ahead, Macquarie said it prefers suppliers tied to Google, leaning toward Broadcom, MediaTek and GUC, and highlighted expected revenue contributions from Google’s TPU projects through 2027.