AI after the rally
Finding the next layer of technology winners
For marketing purposes. Your capital is at risk. This is a marketing communication. Please refer to the prospectus of the UCITS and to the KIID / KID before making any final investment decisions.
The opportunity hasn't gone away — it's moved on
Our view is that the artificial intelligence (AI) opportunity is entering a new phase. The first was led by the companies creating large language models, supplying leading-edge chips and providing the cloud platforms that allowed AI capability to scale. We believe that the next phase is likely to be driven by build-out and deployment: the physical infrastructure, specialist components and enabling technologies required to turn AI ambition into practical business use and productivity gains.
This shift changes where the best investment returns are likely to come from. The first phase was all about computing power, and it rewarded the chip and cloud giants who supplied it. The second phase is about actually putting AI to work. It’s here we see AI’s roll-out running into some very physical limits: power, grid connections, memory, storage, cooling and packaging. These are the areas where supply is scarce, contracts are long and pricing power is real. They are also where a wider, more interesting and less well appreciated set of opportunities are starting to open up.
Where the money is going
The clearest evidence of this ‘opportunity shift’ is the money itself. The largest US cloud and AI infrastructure providers are on course to spend close to $700 billion between them in 20261. That figure is more than the entire US oil and gas sector invests in production. Just as revealing is how their management teams talk: the problem they describe is not finding customers, it is getting hold of enough chips, memory and power to meet the demand they already have.
What does this mean in practice? Much of that money goes to the chips and accelerators that everyone already knows about, and that most investors already own. The more interesting question is the infrastructure build-out that surrounds them: the data centres, cooling, memory, storage and, above all, the power needed to run AI at scale. A lot of these companies are mid-cap or industrial names. That means they can sit further down technology indices or fall into the ‘off benchmark’ category. That is exactly the ground where active research (and a flexible approach to exposures) can find things a passive allocation never will.
1 Moody’s Ratings, March 2026
3 areas where AI demand is broadening
Three bottlenecks show how the opportunity is widening beyond the chip makers, and why each one calls for careful selection rather than a broad-brush allocation to the theme. The demand is clear enough in every case; the returns are anything but uniform.
Semiconductor equipment – the toll road on every chip
AI does not just need more chips; it needs more complex ones, and every advanced processor is built with highly specialised manufacturing tools. Companies such as Lam Research make that equipment. It is hard to build, hard to replace, and AI is growing the market for it rather than just riding the cycle.
Memory and storage – the overlooked part of the story
AI needs vast amounts of memory, and the handful of companies that make it are effectively sold out. Storage benefits too. Businesses such as Western Digital sit in the part of the chain that grows with the sheer amount of data AI creates and keeps – something the market has tended to overlook.
Power – the real limiting factor
More and more, what holds AI back is not chips but electricity, and the grid cannot keep up. Data-centre power demand is on track to roughly treble by 20302, which is pushing operators to secure their own supply. Companies that can provide reliable power quickly –such as Bloom Energy – are moving from the edge of the AI story to the middle of it.
Not every AI winner is worth owning
A wider opportunity set is not a reason to buy the whole theme. Selectivity remains key. A lot of this demand is cyclical as well as structural. Memory, in particular, has seen demand fluctuate and today’s high prices will not last forever. Some companies however, are building real, lasting advantages; others are just enjoying a demand spike their share prices have already run past.
Identifying the long-term beneficiaries is key and that is why valuation matters as much as the theme itself. We follow a growth-at-a-reasonable-price approach: looking for companies with a strong, durable position and real pricing power, at a price that does not already assume everything goes right. In practice, we are happy to buy the businesses doing the essential work when we can see how the cash flows stack up, and wary of the more speculative corners – parts of quantum computing, some space-related names, a few of the newer nuclear stories – where the valuations have run well ahead of anything happening today.
That discipline has a practical payoff. Over the longer term it tends to result in a smoother ride than the market – keeping pace when technology runs higher, but giving up rather less when it falls back.
Accessing the less obvious
technology opportunity
CT (Lux) Global Technology
This is where active technology investing earns its place. A standard technology index is largely a reflection on the largest incumbents and broader capital flows. The companies that benefit further down the AI build-out are often small- and mid-cap, off-benchmark industrial or supply-chain names that sit well below the top of that index.
CT (Lux) Global Technology invests right across the cap scale, usually holding 50–75 companies from under $1 billion up to the industry heavyweights, with a deliberate tilt towards the smaller and mid-sized businesses that pair real growth with an established position – the part of the market where fewer people are looking and price anomalies more commonly can be found.
Beneath the fund sits a specialist team that covers technology by sub-sector. That depth of expertise and insight matters, because the next phase of AI will not be captured by a single type of company or a simple thematic screen. It takes a proper understanding of the whole supply chain, from semiconductors and software through to infrastructure, power and the industrial businesses doing the deployment.
The AI opportunity is not over; it is moving. The first phase rewarded the obvious winners. The next may reward the companies quietly supplying the components, infrastructure and power that turn AI from promise into everyday use – and that is exactly where active, price-aware investing can find them ahead of the crowd.
CT (Lux) Global Technology
Key Risks
Past performance is not a guide to future returns and the fund may not achieve its investment objective. The value of investments can fall as well as rise and investors might not get back the sum originally invested. This fund is suitable for investors who can tolerate high levels of risk and volatility and have a long-term investment horizon. Investors could lose some or all their capital and should read the Prospectus for a full description of all risks.
Investment risks: Investment in equities, sector concentration and currencies.
Past performance is not a guide to future performance.
Calendar year performance (%, net of fees)
2025 | 2024 | 2023 | 2022 | 2021 | 2020 | 2019 | 2018 | 2017 | 2016 | |
|---|---|---|---|---|---|---|---|---|---|---|
CT (Lux) Global Technology | 33.2 | 25.6 | 43.2 | -32.0 | 37.5 | 43.0 | 53.1 | -9.7 | 33.8 | 14.6 |
MSCI World IT 10/40 Index | 26.4 | 28.7 | 55.9 | -30.6 | 30.1 | 44.3 | 48.2 | -2.3 | 39.7 | 12.0 |
Annualised performance (%, net of fees)
Source: Morningstar UK Limited © as at 30 June 2026 and shown in USD. Based on class AU USD (ISIN: LU444971666). Performance for periods greater than 1 year is annualised. Based on the NAV (SICAV) and assuming income is reinvested including ongoing charges excluding entry and exit charges. The benchmark changed from MSCI World Information Technology Index to MSCI World Information Technology 10/40 Index on 18 October 2023. The benchmark does not include fees or charges and you cannot invest in it. The return of your investment may change as a results of currency fluctuations if your investment is made in currency other that used in the past performance calculation. For detailed information on Fund Changes please see “Significant Events – CT (Lux) Funds” PDF available on columbiathreadneedle.com/en/changes.
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