Catenaa, Sunday, October 25, 2026- US tech sector earnings in Q3 point to strong compute demand and continued capital expenditure expansion, Standard Chartered said.
In its weekly market review, Standard Chartered said it maintains a favorable long-term outlook on AI investment but cautioned about short-term funding and execution risks.
“We prefer to avoid increasing exposure to higher-risk areas within the technology sector for now,” the bank said.
Standard Chartered said that recent earnings reports suggest that major tech companies are committed to expanding their AI infrastructure.
Standard Chartered expects borrowing to play a larger role in financing the AI infrastructure boom as technology companies increase spending on data centers and computing equipment.
“We expect debt-financed AI capex to rise from c.25% of AI capex in 2026 to c.40% in 2027,” the bank said, adding that greater reliance on borrowing increases sensitivity to interest rates, while deployment delays could postpone revenue recognition amid ongoing financing costs.
The bank expects wider commercial adoption of AI services to generate additional cash flow, potentially helping technology companies finance more infrastructure investments without relying as heavily on external borrowing.
“Against this backdrop, we will assess Big Tech earnings next week for greater clarity on capex guidance and funding and AI monetization trends,” the bank said.
According to Standard Chartered, the upcoming Big Tech earnings raise uncertainty as market leadership remains concentrated and share-price reactions are more mixed.
Standard Chartered said future equity performance would depend more on companies delivering stronger earnings than on higher valuations. It identified sustainable AI financing, commercial returns on infrastructure spending and broader profit growth outside technology as important factors for investors.
“We remain invested but defensively positioned, favoring diversification across sectors and regions,” the bank said.
