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Jefferies Warns AI Earnings Growth to Slow and Urges Investors to Diversify
M
Moneycontrol•17-10-2026, 14:51
Jefferies Warns AI Earnings Growth to Slow and Urges Investors to Diversify
- •Jefferies predicts global AI earnings growth will drop from 100 percent in 2026 to 30 percent in 2027 and 22 percent in 2028.
- •Global AI stocks currently trade at 23 times forward price-to-earnings compared to 13 times for non-AI stocks.
- •The firm advises investors to diversify beyond the technology theme due to slowing growth and high valuations.
- •Jefferies maintains strategic holdings in key semiconductor suppliers like TSMC, Samsung Electronics, and SK Hynix with adjusted weights.
Key Questions Answered
According to Jefferies, consensus earnings growth for AI-related stocks in the MSCI AC World Index is projected to drop from roughly 100 percent in 2026 to 30 percent in 2027, and moderate further to 22 percent in 2028.
Global AI stocks trade at 23 times forward price-to-earnings on an equal-weighted basis, whereas stocks outside of AI trade at 13 times, meaning investors are paying a much higher multiple for AI companies despite cooling expected growth.
Jefferies' portfolio continues to hold positions in Taiwan Semiconductor Manufacturing Company (TSMC), Samsung Electronics, and SK Hynix, though their combined allocation is kept lower than their weight in regional benchmarks.
