We Are Still in the First Act of the New Artificial Intelligence Investment Cycle

De Frutos points out that investment remains concentrated in models, chips, data centers, and energy, while the adoption and monetization phase — the “second act” — is beginning to emerge, although it is not yet clearly reflected in earnings.

He identifies the arrival of artificial general intelligence, and particularly the recursive improvement of models, as the key inflection point to monitor, alongside factors such as cybersecurity and system alignment.

For the CIO of Mora Capital Group, AI should not be analyzed as a single sector, but rather as a value chain with different fundamentals at each stage: capabilities and monetization for models and platforms; contracted capacity and pricing power for semiconductors and infrastructure.

In all cases, the investment team also monitors customer concentration and return on invested capital.

De Frutos qualifies the debate surrounding a potential bubble: the forward P/E ratio of the Nasdaq-100 is close to its five-year average, as earnings have grown at a pace similar to prices.

For this reason, he prefers to speak of an “anti-bubble” rather than a generalized speculative phenomenon, although he acknowledges the risks that could arise if the market capitalizes too early on potential that remains uncertain.

Regarding portfolio construction, De Frutos explains that Mora Capital Group prioritizes equities in order to participate in the sector’s growth, with fixed income acting as a buffer and private equity providing access to unlisted companies.

He also cautions that excessive diversification away from market leaders is not a neutral decision, but rather an implicit bet on where the best risk-adjusted returns will be found.

The analysis concludes with the firm’s central macroeconomic scenario: a reacceleration of the economic cycle, with productivity acting as a lever to absorb cost pressures.

De Frutos also discusses how Mora Capital Group incorporates geopolitical risks into its investment analysis, without considering their mere existence sufficient justification for maintaining a permanently defensive positioning.

Fernando de Frutos is Chief Investment Officer of Mora Capital Group, where he leads the firm’s investment policy and oversees the investment process as a whole.

He has more than 25 years of international experience in wealth and asset management, having held senior positions at Monitor Deloitte, ABN AMRO Private Banking, Clariden Bank (Credit Suisse Group), and BBVA Private Bank.

He holds a PhD in International Affairs and Political Economy from the University of St. Gallen and is a CFA charterholder.

We invite you to read the full interview in Funds Society 👇

https://www.fundssociety.com/es/noticias/mercados/bor26-fernando-de-frutos-mora-capital-seguimos-en-el-primer-acto-del-nuevo-ciclo-de-inversion-de-la-ia/

Legal Disclaimer

The views expressed in this article are solely those of Fernando de Frutos and do not necessarily represent the corporate position of Mora Capital Group or any of its entities. This content is provided for informational purposes only and does not constitute investment advice, an offer, or a personalized recommendation to buy or sell any financial instrument. Past performance is not indicative of future results. Investors are advised to consult their financial advisor before making any investment decision.