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1 minutes to read by  G.Giammattei, RBC Emerging Markets Equity team Nov 21, 2025

Guido Giammattei, EM Equity Portfolio Manager, looks at the current surge in AI investments and discusses whether we are still in the early stages of growth or nearing unsustainable levels.

Key takeaways:

  • The AI boom continues: there is no sign that CapEx in AI infrastructure is slowing, the leading companies driving these investments maintain strong balance sheets, and demand for AI services continues to grow exponentially.

  • Reasons for skepticism: rising leverage, the risk of competition undermining monetization, and growing energy and infrastructure constraints are raising concerns.

  • EM IT sector is resilient: despite its recent outperformance, the sector continues to trade at a significant discount to DM IT. This discount, and the fact that it is less widely owned than U.S. tech, could provide resilience in the event of a significant market correction.
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