From the studio

Podcast:Investors Club: Fed easing and geopolitics (13 min)
Video: CIO's Devinda Paranathanthri on putting cash to work (2 min)
Video: The China equities rally with CIO's Suresh Tantia (6 min)

Thought of the day

The Nasdaq ended Friday at a fresh record high, with the largest 100 companies posting their longest winning streak in more than a year, as markets gear up for the resumption of Federal Reserve policy easing this week. The tech-heavy benchmark has risen nearly 15% this year.

The recent slew of positive corporate headlines also underpinned the rally, including Broadcom’s USD 10bn new AI chip order, Oracle’s positive cloud outlook, TSMC’s sustained sales growth, and Alibaba’s moves to shore up its AI ventures.

Without taking any single name views, we continue to believe that investors focused on transformational innovation will outperform broader markets. Recent developments and intact long-term drivers in the areas of Artificial intelligence, Power and resources, and Longevity have reinforced our conviction.

Robust investment and encouraging monetization should continue to underpin AI growth. Oracle’s outlook for its cloud business suggests that we are still in the early stages of the AI transformation, with Chairman Larry Ellison noting that “not everyone fully grasps the extent of the [AI] tsunami that is approaching.” We think the next leg of growth will likely come from continued inferencing growth, broader AI adoption, and agentic AI, which can make decisions and take actions to achieve a goal without needing step-by-step instructions. This means demand for AI compute capacity should continue to increase despite the significant growth of the past few years. With ongoing investment and encouraging monetization trends, the fundamentals of AI’s growth story remain robust, in our view.

Global demand for power is accelerating amid AI data center development. The contract behind Oracle’s cloud revenue outlook is the USD 300bn, five-year deal with OpenAI for computing power, which will reportedly require 4.5 GW of data center capacity and saw Oracle guide for higher capex this year. We think the commitment underscores how the rapid expansion of AI infrastructure is directly translating into substantial power requirement. Indeed, NVIDIA recently suggested that AI data center capital spending globally could reach USD 3-4tr annually by 2030—a roughly 38% growth rate from today’s spending levels. This implies potential electricity demand growth of 170 gigawatts (GW) globally and 110 GW in the US, in line with the forecasts from McKinsey, the Electric Power Research Institute, and the US Department of Energy. For context, the US installed power-generating capacity was about 1,000 GW in 2024. With AI data center development being just one of the pillars supporting growing electricity demand globally, we continue to see a rapidly growing need for additional electric-generating capacity and associated grid infrastructure to ensure adequate supply and grid resilience, supporting our long-term view of the Power and resources theme.

Innovation in obesity, oncology, and medical devices should drive Longevity opportunities. Despite recent volatility in obesity-related names amid ongoing policy uncertainty, we think the scale of opportunities to address the chronic disease remains significant. Nearly a billion people worldwide are living with obesity, yet the adoption of GLP-1 therapies is still in its early stages, particularly outside the US. Demand for effective, safe, and convenient obesity treatments continues to grow, supporting a robust runway for future expansion. Separately, we expect oncology pharma sales to climb from USD 220bn in 2024 to nearly USD 320bn by 2028, with a rich pipeline of innovative treatments, while innovation in medical devices should also play a critical role in supporting longer, healthier lives.

So, we expect these structural growth themes to deliver attractive returns in the years ahead and recommend diversified exposure to innovation leaders in these areas.