Could the Iran War Cause the AI Bubble to Burst

• The market is mispricing the long-term repercussions of oil disruptions, with energy prices likely to rise further due to impacts on logistics and asset impairment in the Middle East.
• Many cyclical and tech companies are priced to perfection, vulnerable to economic slowdowns driven by higher energy costs and tightening capital.
• The Iran conflict could contribute to an AI bubble bursting by impacting funding from Middle Eastern investors and increasing the cost of capital.
• India remains a bullish outlook due to its coal-heavy energy production, advanced refineries, and focus on infrastructure/utilities, making it less exposed to oil price shocks.

GQG Partners Portfolio Manager Brian Kersmanc warns that the market is complacent about the Middle East ceasefire, underpricing long-term oil disruptions and their inflationary impact. He believes many cyclical and tech stocks are priced to perfection, making them vulnerable to higher energy costs and tightening capital, potentially leading to an AI bubble burst. He remains bullish on India due to its energy mix and infrastructure focus.