Steve Chiavarone, the Chief Investment Officer for Global Equities at Federated Hermes, stated on October 21, 2026, that the artificial intelligence investment cycle is not yet a bubble. He believes the current growth phase will continue for several years.
The investment firm highlights that current capital flows are directed toward tangible infrastructure, specifically data centers, semiconductors, and power generation. Chiavarone notes that this focus encourages rational capital allocation compared to historical market bubbles.
Federated Hermes has increased its earnings estimates for the S&P 500. The firm projects a year-over-year profit-margin expansion of approximately 9% as of mid-2026, attributing this growth to capital spending on AI infrastructure.
Chiavarone assumed his current role on September 1, 2026, replacing Steve Auth. He previously served as the Deputy CIO for Global Equities and led the Multi-Asset Group, bringing over 20 years of investment experience to his position.
