The AI Boom Hits a Reality Check

Angelo Zino, Senior VP and Technology Equity Analyst at CFRA, says the AI narrative is shifting as the market moves beyond deep-pocketed hyperscalers to smaller players who lack the same financial muscle. He argues that valuations for the most prominent tech names remain reasonable. Still, investors are increasingly uneasy about whether AI spending can sustain its current pace into 2026–27 amid financing challenges, energy constraints, and broader macro risks. While Nvidia’s strong results were expected, Zino believes the real test of sentiment lies with companies like Oracle, which sit at the center of AI infrastructure demand but face greater pressure on funding and customer concentration. He also notes that the payoff for today’s massive AI investments remains uncertain, with consumer usage soaring but enterprise adoption still slow to accelerate.

We dig into: 👉 Why Wall Street may be rethinking the entire AI narrative 👉 The shift from hyperscaler-driven demand to a broader — and weaker — customer base 👉 Whether 2026–2027 poses real risks to the AI spending cycle 👉 The valuation vs. growth debate: are we priced for perfection? 👉 Why enterprise AI adoption is moving much slower than consumer usage 👉 And which earnings (hint: Oracle) will actually decide where the AI trade goes next