Europe Capital Partners flags risk to US tech margins if AI capex boom cools
QQQ•Europe Capital Partners flagged near-vertical AI capital expenditure growth through the fourth quarter of 2026, warning that slower growth or easing supply constraints could weaken US tech pricing power and profit margins.
1. AI spending and margins
Europe Capital Partners said AI spending by hyperscalers has boosted demand, pricing power and US tech profit margins, supporting an outsized share of earnings-per-share growth. It warned that capital spending does not guarantee returns, with future cash flows unproven, and said a key focus in 2027 will be whether returns justify the capital deployed.
