The tech trade has handed investors both big gains and big worries. On Wednesday, Aisa Ogoshi, a managing director and Asia Pacific equities portfolio manager at JPMorgan Asset Management, told Bloomberg Television that the rally still has room left, even after a long stretch that has packed an unusual share of the market’s value into a small handful of companies.

Ogoshi did not downplay the danger. The biggest risk in the market right now, she said, sits inside the tech trade itself, because so much money is riding on so few names. When a small group of stocks carries the whole market higher, a stumble by any one of them can pull everyone down with it. That kind of concentration is exactly what makes experienced investors nervous.

Even so, she sees more room to climb. The next stretch of gains, in her view, runs through what she called the AI data center supply chain — the businesses that build, power, and connect the massive computing hubs that artificial intelligence depends on.

Here is what that means in plain terms. Every time a company rolls out a new AI tool, that tool has to run somewhere. It runs inside data centers, which are warehouse-sized buildings packed with specialized computers. Those buildings need chips to do the thinking, electricity to keep the machines running, cooling systems to stop them from overheating, and networking gear to tie everything together. Each of those pieces is a business, and many of them are publicly traded.

The spending behind all this is enormous. The group of giant technology companies often called the Magnificent Seven — Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia, and Tesla — is on track to spend roughly $527 billion on AI and data center projects in fiscal 2026, well above earlier estimates. Looking further out, total spending on data center infrastructure worldwide is expected to approach $1 trillion annually by 2030.

That wave of money is the heart of Ogoshi’s argument. The household-name tech stocks have already climbed a long way, and many now trade at rich valuations. But the suppliers further down the chain — the firms selling power equipment, cooling systems, network switches, and chips — stand to keep collecting orders as long as the building boom continues.

Nvidia, the chip designer at the center of the AI boom, remains the most direct way to bet on that demand, with a market value north of $4.5 trillion. Beyond it sit less famous names that still play essential roles. Vertiv makes the power and liquid-cooling systems that keep dense racks of computers from overheating. Arista Networks sells the high-speed switches that move data inside AI clusters, with customers that include Meta and Microsoft. Neither company is a household name, but both benefit whenever a new AI data center comes online.

The reason Ogoshi points beyond the obvious winners is straightforward. Betting everything on a single famous stock concentrates risk in one company, one product line, and one valuation. Spreading investments across the broader supply chain gives investors a way to participate in the AI buildout without relying entirely on the most crowded trade in the market.

Ogoshi also weighed in on Japan, where she spends much of her time as an Asia-focused portfolio manager. The Bank of Japan raised its benchmark interest rate to 1% from 0.75% at its June 15–16 meeting, continuing its gradual move away from years of near-zero borrowing costs. The central bank has been tightening policy as inflation remains above its 2% target, supported by a weaker yen and elevated energy prices.

Rising rates in Japan matter far beyond Tokyo. For years, Japan’s ultra-low rates made it a popular place for global investors to borrow money cheaply and invest elsewhere. As Japanese rates rise, that equation changes, potentially affecting capital flows and investment decisions worldwide.

For everyday investors, the takeaway from Ogoshi’s comments is less about chasing the latest hot stock and more about understanding where AI spending is actually going. The software gets the headlines, but the money is increasingly flowing into physical infrastructure — buildings, power systems, networking equipment, cooling technology, and advanced chips.

That does not eliminate the risk she highlighted. A market leaning heavily on a handful of technology giants can reverse quickly if AI investment slows or if one major player disappoints investors. But for now, Ogoshi’s message is that the trend remains intact, and that some of the best opportunities may lie one step behind the biggest names grabbing the spotlight.

As AI adoption continues to accelerate, the companies supplying the infrastructure that powers it may become some of the most important — and potentially most profitable — businesses in the market.

Wall Street – JBizNews Desk

© JBizNews.com All Rights Reserved. Reproduction or distribution without written permission is prohibited.