BlockBeats News, September 26th, Panmure Liberum strategist Joachim Klement stated that tech giants are pouring massive amounts of capital into the field of artificial intelligence, driving the continuous rise of the U.S. stock market. However, the continuously rising long-term U.S. Treasury bond yield is now threatening the investment frenzy in infrastructure such as data centers. The challenge facing the AI investment frenzy is that the significant capital required needs to be achieved through financing, with a considerable portion of the investment relying on debt financing. Since 2023, the long-term bond yield has risen significantly (excluding recent declines) and may continue to rise in 2026. This will increase the cost of debt, leading to some investment projects becoming unprofitable.
Data shows that for every 1 percentage point increase in the long-term bond yield, the growth rate of IT equipment investment may decrease by 0.6 percentage points, and the growth rate of software investment may decrease by 0.4 percentage points. Although a higher bond yield will not completely stifle growth, it will inevitably cause a slowdown. Given that current valuations already include overly optimistic expectations, this could lead to a market downward revision of profit forecasts for mega-cap companies and other growth stocks. (Jinshi)
