Julie Biel, CFA, Chief Market Strategist, joined Bloomberg Surveillance to discuss how rising interest rates are influencing the AI investment cycle, why investors may want to look beyond the companies driving infrastructure spending, and how higher yields are changing the risk-reward equation across asset classes. While AI-related investment remains strong, Julie highlights where future growth expectations could become more difficult to meet.
Interest Rates May Be Tempering Excesses
While some investors worry that AI-related capital spending is creating bubble-like conditions, Julie notes that higher interest rates and other frictions are acting as moderating forces. In her view, these constraints may help limit excesses, even as the stock market remains heavily reliant on continued growth tied to AI-related investment.
The Opportunity May Extend Beyond Infrastructure Providers
Julie points out that semiconductor earnings and AI-related spending remain strong in the near term, but sustaining that level of capital investment becomes increasingly challenging over time. Rather than focusing solely on the companies funding the buildout, she sees opportunity among businesses using AI to improve productivity, automate workflows, and strengthen earnings power noting that small-cap companies may be particularly well positioned, given their greater exposure to labor-intensive business models that could benefit from automation.
Higher Yields Are Raising the Bar for Equities
With fixed income offering increasingly attractive yields, Julie believes equities face greater competition for investor capital. While she sees merit in select areas of credit, she emphasizes the importance of maintaining balance and remaining mindful of liquidity considerations if market conditions become more challenging.
Watch the full interview to hear Julie Biel’s complete perspective.
Recorded on August 21, 2026.
