US AI Investment Cycle Faces Test Amid Market Fatigue

Analysts compare the current surge in artificial‑intelligence spending to historic US investment cycles in railroads, electrification and the Internet era, noting that AI could soon account for around 3 % of U.S. GDP. The pattern typically moves from euphoria to overcapacity, a correction and then a mature growth phase.

A Jefferies report warns that investors are now questioning whether the AI boom is losing momentum. The upcoming quarterly earnings of the four biggest U.S. hyperscalers – Alphabet, Amazon, Meta and Microsoft – slated for 22 July will serve as a stress test for the AI narrative. The report cites “AI fatigue” and a possible rotation toward cheaper value stocks, including firms in India and China, while stressing that continued capital spending on AI infrastructure remains essential for long‑term returns.