We Asked Fidelity’s Director of Global Macro Who Wins If AI Spending Slows

Jurrien Timmer argues that the recent AI selloff is best understood as a market forcing a rethink of the financing model behind data centers and hyperscaler capex, not a rejection of the technology itself. He says the market had already been “regulating” the trade because capital needs were getting so large that investors started questioning sustainability, and he thinks a slower buildout could ultimately help the big incumbents that already have strong cash flows.

He frames valuations through earnings growth, interest rates, and payout behavior. In his view, investors do not pay up for peak earnings, especially when those peaks are driven by cyclical industries like semiconductors. He says the Fed model still matters because higher bond yields compress equity multiples, and he sees the current backdrop as one where earnings are strong but valuations have to absorb the pressure from higher real rates and a higher cost of capital.

Timmer also emphasizes that the market’s structure matters as much as the macro backdrop. With the S&P 500 heavily concentrated, he says many stocks can remain in uptrends even when the index struggles. That is why he prefers a broader strategic mix than a simple 60/40 portfolio, including international equities, bonds, gold, commodities, cash, and other diversifiers. His core lesson for investors is to zoom out, rebalance, and think in terms of liquidity provision rather than panic selling.