Macro strategist Sam Rines of WisdomTree has suggested that a potential slowdown in artificial intelligence capital expenditures could impact semiconductor suppliers more immediately than companies using AI to enhance existing operations. In an exclusive interview with Benzinga, Rines argued that investors are beginning to scrutinize the returns on massive infrastructure spending.
Rines noted that while capital expenditures are currently tolerated, they are not appreciated by investors if companies cannot clearly articulate the financial returns. He pointed to Microsoft and Alphabet as examples of firms where AI is beginning to contribute to revenue and improve advertising performance. In contrast, he suggested that the impact of a spending slowdown would likely be felt most by semiconductor and infrastructure providers.
The strategist highlighted Nvidia Corp as a company with significant exposure to this dynamic. Nvidia’s data-center business relies heavily on the demand for computing infrastructure required to build and deploy AI systems. Rines stated that if major hyperscalers like Microsoft, Alphabet, and Meta begin trimming or delaying infrastructure investments, Nvidia could face a different market environment than a company using AI to improve an established revenue engine.
Regarding Meta Platforms, Rines described the company as potentially being on the other side of the cycle. He characterized Meta’s strategy as less about building AI infrastructure and more about using AI to strengthen its core advertising business and expand its product lineup, including the Muse product and enterprise offerings. Rines suggested that if the infrastructure spending cycle cools, the critical question for Meta investors would be whether AI continues to produce measurable gains in advertising, products, and engagement.
