Andy Goldberg, chief investment strategist at Nomura Asset Management International, joined Full Signal to discuss the AI boom, hyperscaler debt and the sectors he sees benefiting downstream.
His core takeaway is that the AI cycle is still early and does not look like a bubble to him.
I sat down with Goldberg for a wide-ranging conversation on the AI trade for Full Signal with Phil Rosen.
The bear case gets plenty of headlines, but he argued the data he tracks points the other way.
Why Goldberg thinks the AI cycle is still early
"It's still early," Goldberg said when I asked where we are in the AI market cycle. He noted that past boom-bust cycles in railroads and telecom saw capex reach roughly 25% of GDP, while he put AI spending so far at about $800 billion against a $30 trillion US economy.
He also pointed to demand signals, including a chip shortage index from Nomura's global research team that shows a backlog of several years. Goldberg compared the cycle to a baseball game and said we are in the second or third inning.
For a related angle on the buildout, read why the AI buildout won't bring another 1999-like overbuild.
Valuations are falling while earnings climb
Goldberg said the S&P 500 was up about 13% this year at the time we spoke, yet cheaper on forward valuations than at the start of the year. He said the price-to-earnings ratio has slid from roughly 23 to below 20 as the 10-year Treasury yield rose about 85 basis points since October 2025, to around 4.8%.
In his view, that is "a pretty well behaved market that's paying attention to its surroundings." He expects earnings growth to cool from the latest quarter, which he put at roughly 54% year over year, but still run at a double-digit pace.
Hyperscaler debt and circular financing
Goldberg does not see hyperscaler borrowing as a red flag yet. He called debt a normal way to fund big investment cycles, said these companies are among the highest-rated credits in the market, and noted he is watching it closely because he expects them to become the largest issuers of investment grade debt by 2030.
He framed it this way for investors, saying "instead of owning this AI trade all through equity, you can actually own some debt."
On circular financing around Nvidia, he said the concern only becomes real if one link in the chain breaks, and that he sees low odds of AI demand disappearing.
The three sectors Goldberg named beyond tech
Rather than tech, Goldberg named healthcare, industrials and financials as beneficiaries downstream of the AI buildout. In healthcare, he expects AI to speed up drug discovery and make treatment far more personalized, even "a digital clone of you and your body."
In industrials, he pointed to data center construction, ongoing maintenance spending that he said is about 15% of total capex, and tax incentives from the OBBBA. In financials, he cited lending to hyperscalers, healthy net interest margins and capital markets activity such as M&A and IPOs.
Rates, market breadth and the risks he watches
Goldberg said he does not expect the 10-year yield to break 5%. He argued that one or two Fed rate hikes could signal inflation-fighting credibility and pull long-term yields lower, adding that he "personally would welcome a rate hike."
He also noted the Magnificent 7 make up about a third of the S&P 500, and that the equal-weighted index had beaten the cap-weighted index by roughly 300 basis points this year. "I think it's time to start taking a little bit off the table with the tech trade and spreading the love a little bit," he said.
The risks he flagged were cyber threats and local legal fights over data centers, adding that "AI has a PR problem."
For those who worry about a pullback, he said there is value in "not fighting a very, very powerful trend" while diversifying with hedges and fixed income.
Tune in to the full conversation with Andy Goldberg on YouTube, Spotify and Apple Podcasts.
For more on the AI trade, read how the AI bubble could pop even if demand never disappoints, and subscribe to the free Opening Bell Daily newsletter for a daily briefing on stocks, macro and Wall Street.
This post is for informational purposes only and is not investment advice. The views expressed are those of the guest, and Nomura Asset Management is an investment manager that may offer products related to the themes discussed.