Adam Parker, founder of Trivariate Research, acknowledges the scrutiny surrounding the AI trade due to rising credit concerns but maintains a bullish outlook. He believes that the current investment cycle could last up to ten years, with significant productivity gains from AI yet to be reflected in corporate earnings.
Parker points out that only 15% of companies were discussing AI-related productivity at the start of 2023, and this figure has not yet reached 50% among the top 500 US equities. The S&P 500 has seen substantial gains, rising 84% since May 2023, with the tech sector up 147% and semiconductor stocks experiencing a remarkable 335% increase.
However, October 2026 has shown a downturn, with the VanEck Semiconductor ETF (SMH) dropping 11% and Nvidia falling over 5% amid investor concerns about borrowing. Despite these short-term fluctuations, Parker argues that the potential for sustained earnings growth driven by AI productivity remains strong, suggesting that investors should not exit their positions prematurely