Nomura dismisses ‘AI bubble’ fears, sees resilient 2026 for global equities
KUALA LUMPUR (Jan 14): Nomura Asset Management has dismissed parallels between today’s artificial intelligence (AI)-driven stocks rally and the dotcom bubble, arguing that current valuations reflect sustainable earnings growth and are far from past extremes.
Richard Kruse, head of global equities at Nomura Asset Management, said that while valuations are elevated, they are supported by solid earnings, manageable interest rates, and long-term tech trends — not speculative excess.
“Despite all the big numbers, this looks in line with a previous cycle,” he noted, expecting global equities to remain resilient in 2026.
“Vauations are elevated, but they are high for a reason,” Kruse said during Nomura’s Breakfast Conference 2026 on Wednesday.
Nomura forecasts steady earnings and AI to propel stocks, even amid moderate economic growth and US fiscal uncertainty.
While 2027 may face energy and data centre bottlenecks, Nomura stays overweight on AI infrastructure — chips, data centres, and compute capacity — where growth projections exceed 30%, compared with 8%–12% for AI software and adopters.
Meanwhile, 2028, Kruse said, will be the year that will test whether corporations can translate AI adoption into sustained demand.
Kruse added that the US will remain the main driver of global equity performance, given its dominance in indices and concentration of growth sectors, while Europe and Japan are unlikely to lead markets independently.
Kruse highlighted three key downside risks that could unsettle markets: first, a consumer-driven US recession, and second, escalating geopolitical tensions, particularly if US–Europe relations deteriorate, which could unsettle bond markets and spark volatility across global financial system.
He said the third key risk is sudden disruption in AI trends — such as shocks in the past from players like DeepSeek — that may expose misplaced or unproductive investments, undermining confidence in the sector and triggering sharp corrections in tech valuations.
Brett Collins, portfolio manager for Multi-Asset Credit strategies at Nomura, speaks at the event.
Separately, Brett Collins, portfolio manager for Multi-Asset Credit strategies at Nomura, projected US gross domestic product (GDP) growth of 2.2% in 2026, with slower momentum early in the year before improving on election-year fiscal stimulus, Federal Reserve easing and lower taxes.
He said US President Donald Trump’s focus on affordability ahead of the midterms is likely to translate into further stimulus measures. “We would expect to see significant fiscal stimulus trying to drive economic growth,” Collins said.
Collins noted that US policy uncertainty remains a source of volatility, with housing affordability emerging as a key issue for Trump’s administration. Falling approval ratings despite strong equity markets have put pressure on the White House, likely prompting further measures to ease borrowing costs and improve affordability.
