Amundi Asset Management: The market is overly optimistic about the large-scale capital expenditure plans for the artificial intelligence theme

According to the Zhitong Finance APP, Amundi Asset Management recently released its investment outlook for October, mentioning that the U.S. market and, to some extent, the global stock market have been driven by positive news related to artificial intelligence themes. However, Amundi Asset Management believes that the market is overly optimistic about the large-scale capital expenditure plans related to artificial intelligence themes. The key question is: what will be the impact on investment returns if cheaper (for example, during a "DeepSeek moment") and faster technologies emerge? Additionally, fiscal expansion and central bank interest rate cuts have also fueled optimistic sentiment. However, this constitutes the biggest vulnerability. Therefore, risk management is becoming increasingly important. Meanwhile, Amundi Asset Management is looking for more detailed themes, such as corporate reforms in Japan, yield creation in the UK, and fiscal stimulus in Europe (beneficial for small and medium-sized stocks). Overall, the focus remains on high-quality business models and valuations. Amundi Asset Management stated that due to weak consumer spending, which dominates the economy, U.S. economic activity may slow down in the second half of this year. Furthermore, inflation is expected to remain resilient in the short term. Even in the UK, the Bank of England is working to address rising price pressures. However, the environment in Europe is slightly different, with inflation currently under control. Regarding risk assets, although valuations in some areas are high, a slightly positive risk stance is maintained considering the fundamentals and profit potential (without making aggressive predictions). On the other hand, Amundi Asset Management reiterates the need to hedge equities and allocate to tools like gold that can diversify risk and provide stability to the portfolio. U.S. bond yields have fallen over the past few months, while gold prices have reached historical highs. Global and U.S. stock markets have also risen to new highs, mainly driven by investors' expectations of sustained strength in the U.S. economy, a monetary easing cycle, corporate profit resilience, and artificial intelligence-led momentum. Amundi Asset Management believes there is an inherent contradiction in this, but agrees with the view of monetary easing. The contradiction lies in the fact that if the Federal Reserve primarily cuts rates in response to an economic slowdown, then the weak labor market, consumption, and ultimately corporate profits should have already reflected the impact of the economic slowdown. Amundi Asset Management indicated that there is currently an unusual phenomenon combining two situations: U.S. economic growth is slowing, but some risk assets are reaching historical highs. In the Eurozone, the impact of U.S. tariffs and German fiscal stimulus measures on economic growth remains to be seen. In this environment, although there are no signs of recession, the Federal Reserve has initiated a rate-cutting cycle. Even the European Central Bank, which will continue to rely on data-driven actions, may lower policy rates as the end of the year approaches