Nomura Unveils Four Scenarios on AI Investment Cycle as Market Doubts Persist

According to Nomura strategist Naka Matsuzawa in a report on Friday (July 17), the market is grappling with four potential scenarios that could derail AI investments. Beyond the previously identified concerns—cloud giants overspending, elevated memory costs, and central bank tightening—Nomura highlights a fourth risk: memory price spikes could trigger aggressive semiconductor capacity expansion, ultimately causing memory prices to collapse and undermining the economic benefit of AI infrastructure buildout.

Despite strong corporate earnings and continued capex commitments from tech companies, their share prices remain stagnant, signaling a fundamental disconnect between earnings fundamentals and valuations. Matsuzawa notes the bond market has not yet priced in an end to the AI boom, with rate expectations tilted toward increases rather than cuts, indicating market consensus on AI profitability remains incomplete.