Barclays: Nvidia turmoil and financing risks won't derail long-term AI rally, investors should still maintain exposure

BlockBeats news, November 12 - Julien Lafargue, Chief Market Strategist at Barclays Private Bank, stated that despite the turmoil surrounding NVIDIA CEO Jensen Huang's tenure, uncertainty over AI investment returns, and rising financing costs testing market confidence, investors should continue to participate in the AI rally. Lafargue believes that AI is not a bubble but a technological revolution that will affect all industries, though its commercialization and infrastructure buildout cannot happen overnight.

Lafargue noted that NVIDIA is called the "central bank of AI trades," but even if the company changes CEOs, it does not mean that trades across the entire AI supply chain need to be re-examined or renegotiated. He compared a potential leadership transition at NVIDIA to previous management transitions at Microsoft, Alphabet, and Amazon, arguing that a successor taking over does not necessarily diminish corporate value.

However, Barclays listed interest rates and the financing environment as major risks that could disrupt the market. As the scale of AI infrastructure investment expands, market focus is shifting from whether compute demand is real to whether massive capital expenditures can generate sufficient returns. Data center construction also faces bottlenecks such as power access, equipment installation, and commercial operation cycles, while expectations of tighter Federal Reserve policy could also push up corporate financing costs and compress long-term cash flow valuations.

Lafargue emphasized that trillions of dollars in AI investment commitments cannot quickly translate into actual compute delivery, and investment returns among companies will diverge significantly. Tightening financing conditions may alter the industry's investment pace and competitive landscape, but does not mean long-term demand for AI infrastructure has disappeared. Barclays remains inclined to maintain AI investment exposure until there are clear signals of a significant slowdown in industry growth momentum.