Perpetual sees further US tech stock declines as AI investment costs rise
QQQ•Perpetual expects further declines in US technology shares as higher capital costs constrain AI investment. It expects persistent inflation to prompt further Federal Reserve and RBA tightening, with larger increases likely in the US.
1. Tech and rate outlook
Perpetual expects higher capital costs to constrain AI investment spending and contribute to further declines in US technology shares, while intense competition is expected to sustain substantial investment that supports US growth and adds inflationary pressure. It says Australian markets price an 80% chance of one more rate increase, which it considers insufficient to restore inflation to target; longer-term bond yields are expected to remain range-bound, with current pricing consistent with a 5% to 5.25% peak federal funds rate.
