AI May Fuel Profits at Corporate Giants, Hedger Fund Says

Investors are growing jittery about a potential bubble in artificial intelligence stocks, but the real payoff may be just beginning — and it could extend well beyond Silicon Valley’s usual winners, a $19 billion hedge fund investor said.

“This is a generational platform shift. We are in probably the third or fourth inning of the actual build out,” David Craver, the co-chief investment officer of Lone Pine Capital, said on Goldman Sachs’ “Exchanges” podcast published Thursday.

Craver added that while he understands concerns surrounding the vast sums of money being spent on AI, the underlying signals — improving models, tight capacity, and real-world business impact — suggest the cycle still has room to run.

He points to three signals that keep him bullish on AI infrastructure.

First, the models are still improving as more computing power is thrown at them. “They are absolutely getting better,” and have more uses, he said.

Second, demand continues to outstrip supply as hyperscalers and inference providers still lack sufficient capacity, he said.

Third — and most important — companies are already seeing dramatic returns from deploying AI internally.

He said founders and digital-first CEOs are describing “mind-blowing” productivity gains, from automated coding to replacing manual workflows with AI agents.

“We have had numerous CEOs say to us, ‘I think I can triple or more the revenues in my business. And I’m never going to have to hire another human being,'” Craver said.

Still, not every company is seeing those kinds of returns on investment. According to PwC’s latest Global CEO Survey, released last month, 56% of the 4,454 chief executives surveyed said AI has yet to deliver revenue or cost benefits for their businesses.

When legacy companies fight back

Early AI gains have gone primarily to infrastructure leaders like Nvidia and cloud providers. Craver thinks the next phase will be defined by adoption across large, incumbent companies.

“I have a theme that I call ‘revenge of the dinosaurs,’ which is, larger companies are going to adopt this technology and take cost out of their business in a huge way over the next two and three and four years,” he said.

He said the impact would show up clearly in corporate earnings.

“I think we’re going to get on conference calls in 2027, and CFOs are going to say, ‘I just took half a billion dollars out of my spending on an annual basis because we’re implementing this new technology,'” he said.

That dynamic, in his view, is “super bullish for the market.”

Craver’s comments come at a fragile moment for AI-linked stocks, as investors grow more nervous after a blistering multi-year run.

This week, software stocks sold off as investors weighed the disruptive impact of AI against concerns about elevated valuations, aggressive capital spending, and whether the buildout has outpaced fundamentals.

Meanwhile, shares of insurance brokerages, wealth managers, and real estate services firms — sectors seen as exposed to AI disruption — have fallen sharply.

Despite the volatility, Craver said Lone Pine remains “quite bullish on that overall bet” on AI.

“It’s not a bubble when everybody thinks it’s a bubble,” he said. “It’s going to be a bubble when we get to the other side of this.”