AI: declining hype after initial euphoria?
In recent years, the equity markets have been under the spell of the "Magic Seven" (consisting of Apple, Microsoft, Nvidia, Amazon, Alphabet (Google), Meta and Tesla). These companies have had a significant influence on the global
Are the "Magic Seven" not so magical after all?
In recent months, however, there have been increasing signs that the hype surrounding the "Magic Seven" and AI technology is waning. The equity prices of several companies in the "Magic Seven" have recently not only performed negatively, but also significantly worse than the market as a whole, especially Tesla equites. Investors are increasingly questioning the valuation levels, long-term earnings prospects, and the actual profitability of AI investments. The announcement of DeepSeek also led to considerable turbulence for US technology stocks. Nvidia lost almost 600 billion US dollars in market capitalization within 24 hours - the largest one-day loss in Wall Street history. Although the equity has partially recovered since then, the uncertainty remains. However, Nvidia's CEO Jensen Huang emphasized that DeepSeek's innovations will not affect the long-term demand for Nvidia's high-performance chips.
Investment topic "artificial intelligence"
Artificial intelligence has become a major investment topic.
DeepSeek puts the AI boom to the test
In January 2025, the Chinese start-up DeepSeek presented its AI model R1, which was developed at a significantly lower cost and requires less powerful hardware. Remarkably, the model was reportedly trained with around 2,000 older and cheaper Nvidia chips. Nevertheless, DeepSeek achieved results comparable to those of models from Western technology giants, such as ChatGPT, but at only around a tenth of the cost.
This development calls into question the need for massive use of the latest hardware as well as the numerous data centers that are currently being built or planned for AI applications and could have a lasting impact on the market for AI and the infrastructure required for it. At the same time, DeepSeek revealed that the technological lead of US companies in the field of AI applications appears to be far less extensive and, above all, by no means as permanent as previously assumed.
Megatrend AI: here to stay
Despite the turbulence in equity prices and waning enthusiasm, artificial intelligence remains a key driver of innovation. Major US technology companies are continuing to increase their investments in AI and the associated infrastructure. Meta, for example, is planning to invest the gigantic sum of around 200 billion US dollars in the expansion of its AI infrastructure. And the "Stargate" project pushed by the new US administration has announced that it will provide around 500 billion US dollars for the expansion of data centers over the next four years. These investments underline the continuing confidence in the potential of AI.
However, the fact that the euphoria is subsiding is also a positive factor: it means that expectations are becoming more realistic. This also allows us to look beyond the stock market giants to other companies and investment opportunities in connection with AI.
Artificial intelligence is one of the sub-trends in our global megatrend equity fund. Therefore, an investment in Raiffeisen-MegaTrends-ESG-Aktien also allows you to participate in the development of this topic.
AI still in vogue
The greatest euphoria surrounding artificial intelligence seems to be over for the time being. New competitors such as DeepSeek show that powerful AI models are also possible with fewer resources, which has changed market sentiment.
Nevertheless, AI remains a key growth driver and investments in this area is continuing unabated. However, the previously extreme expectations have receded somewhat.
Although AI companies such as the "Magic Seven" are likely to continue to offer high long-term equity price potential, the extraordinary equity price gains of recent years are unlikely to be repeated any time soon. In addition to the investment opportunities, investors have also become more aware of the risks, such as the transience of technological advances or the far from certain profitability of many AI investments.
Our megatrends theme fund recognized AI as an important trend at an early stage. This is why AI is one of 14 sub-trends in the portfolio of Raiffeisen-MegaTrends-ESG-Aktien.
This paid off in 2024, as AI was the sub-trend with the highest performance gains. Of course, there is no guarantee that this will continue to be the case in the future. However, the fund management assumes that the topic will be around for many years to come and will continue to offer good long-term investment opportunities. In view of developments in the sector, the weighting of the sub-trend has been adjusted.
The fund Raiffeisen-MegaTrends-ESG-Aktien exhibits elevated volatility, meaning that unit prices can move significantly higher or lower in short periods of time, and it is not possible to rule out loss of capital.