While underlying adoption remains solid for many providers, several firms have flagged emerging margin pressure as AI‑related investment rises.
Global equities have entered 2026 with strong momentum, but the underlying market rotation is intensifying as investors reassess how value is captured across the AI ecosystem. While upstream capital expenditure remains exceptionally strong, parts of the software sector are facing renewed scrutiny.
Emerging markets and commodities led early‑year performance, but as high concentration in US mega‑cap technology companies persists, the brief outperformance of the equal‑weighted US index highlighted growing investor interest in broader market participation.
Hyperscaler investment surges past new thresholds
Major cloud and AI infrastructure providers have continued accelerating capital expenditure, with market expectations suggesting hyperscaler capex could exceed US$600 billion in 2026, the majority tied directly to AI infrastructure. Several hyperscalers have also turned to bond markets, a shift from historically cash‑funded investment cycles, adding leverage into the AI build‑out.
Two 2025 themes are also persisting:
- Circular financing within the AI supply chain is making true end‑demand harder to interpret.
- Faster GPU depreciation cycles are bringing earnings drag forward as hardware turns over more quickly.
SaaS faces its sharpest challenge yet
The most significant shift in early 2026 has come from the software and data‑platform sector. Following Anthropic’s release of agentic “co-work” tools capable of automating multi‑step workflows, markets reacted sharply. The S&P 500 Software & Services cohort sold off materially and remains lower year‑to‑date, with investors questioning the durability of subscription‑based revenue models.
Analysts note that AI agents may erode the value of traditional per‑seat pricing and compress margins by shifting execution toward APIs and outcome‑based compute. While underlying adoption remains solid for many providers, several firms have flagged emerging margin pressure as AI‑related investment rises.
A clearer divide between upstream and downstream
The landscape so far in 2026 points to strong upstream cash flows and accelerating capex, contrasted with uneven monetisation downstream and deeper questions about how AI is reshaping the economics of software. Investors are increasingly focused on which parts of the value chain capture returns, particularly as AI agents become the marginal “user.”
The bottom line
Global equities have opened the year with higher capital intensity, rising leverage in AI infrastructure, and a sharper lens on the sustainability of software pricing models. Selectivity is becoming more important as markets test the resilience of downstream business models in an agent‑driven environment.