CFRA Research senior vice president and equity analyst, Angelo Zino, shares what he sees as the biggest risks to the AI trade over the next year.
AI backlash to your point is more along the lines of, hey, listen, this is going to get built out because there's going to be a need for it, but um importantly, what it could do is it it could create a timing issue, which could also, you know, create some potential hiccups along the way in terms of where earnings expectations are for the street. In terms of the actual demand trajectory being there, I think, listen, when you look at a a company like Anthropic going from about a billion dollar ARR run rate at the end of 24 to about 65 billion today, potentially looking at closer to 80 billion or plus by the end of this calendar year, the demand, the trajectory is there for us to continue to build. And, um, I would say, you know, it it can't all be anthropic though. Um, it it we need Open AI to really, um, come to its its own as we go into 2027. They have pushed out that IPO from our understanding and um we do again, we need to see them actually show some greater um momentum on the revenue side of things. If that happens, again, I think this this story continues to work and people get more comfortable about that trajectory. But I think open AI is going to be a big risk going into the first half of this year, what that IPO look look looks like, um, and that revenue trajectory as we get into there, and do we potentially even see a further push out of that IPO? So sitting here today, I would say maybe that's the biggest risk um over the next six to nine months, but um to your point, I mean, clearly the the infrastructure build has to happen and that is happening. But um the the trajectory and the timeline of how some of these inflections happen over the next 9 to 12 months will clearly be a risk.
