I would not wait for analysts to downgrade earnings before reassessing AI valuations. Markets are forward-looking, and greater policy uncertainty can justify a higher risk premium even when earnings forecasts remain unchanged.
However, congressional scrutiny does not automatically translate into restrictive legislation or weaker profitability. I would distinguish political rhetoric from actual changes to data-centre approvals, investment incentives and operating costs.
AMD's strong data-centre growth suggests resilient AI demand, but sustainable profitability matters more than revenue growth alone. Apple's margin pressures also highlight the importance of earnings quality.
My priorities would be company guidance, capital expenditure efficiency, free cash flow and profit margins.
Ultimately, I favour financially resilient AI businesses with sustainable competitive advantages over speculative growth narratives.
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