Principal Asset Management’s Shah highlights sustained AI spending and diversified earnings as key supports for equities despite volatility.
Principal Asset Management’s Chief Global Strategist Seema Shah argues that earnings growth has expanded beyond tech for multiple quarters, underpinning a resilient bull market. She notes the Russell 2000’s record close and healthcare’s strongest week since June 2022 as evidence of broad strength beneath AI-driven volatility.
WTI crude’s decline from $115 to $79 has eased cyclical inflation pressures, though Shah warns AI capital expenditures will likely keep structural inflation above the Fed’s 2% target. The Bank for International Settlements recently flagged risks tied to AI expansion and rising debt, adding to market caution.
Shah’s outlook remains constructive, citing three pillars: sustained AI earnings, infrastructure buildout, and diversified growth. She anticipates near-term volatility but expects the AI thesis to hold over the next 6-12 months.