RBC BlueBay expects Japanese AI-related stocks to dip in the near term as investors reassess U.S. cloud spending, but to rebound in 2027 on favorable policy sentiment. Japan's broad exposure to the AI supply chain—spanning cables to ceramics—and its liquid equity market position it as a key beneficiary of global AI infrastructure spending compared with regional competitors.
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RBC BlueBay Asset Management portfolio manager Maya Funaki said Japanese AI-related stocks are likely to correct over the next two months due to investors pricing in peak U.S. hyperscaler (large cloud provider) spending growth and seasonal rebalancing, but expects a rebound in 2027 amid improving sentiment on favorable U.S. policy measures.
Why it matters
Japan's AI exposure spans the supply chain—from cables to capacitors—making it a key beneficiary of the global AI infrastructure buildout. The country's deeper, more liquid equity market also makes it easier for overseas investors to deploy capital compared with regional peers like Taiwan and South Korea. However, the AI rally has increased concentration risk in the Nikkei 225 index.
What to watch
Funaki manages about ¥1 trillion ($6.2 billion（約9900億円）) in Japanese equities and maintains AI exposure while rotating into cheaper AI names and using a barbell strategy that pairs high-risk AI stocks with lagging value shares as a hedge.
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