May 2026
In the age of AI euphoria, Alvia Portfolio Manager Chris Scarpato is asking an uncomfortable question: what if the returns don’t justify the spend?
In a recent interview with Livewire Markets, Chris discussed why Alvia is not chasing the most crowded parts of the AI trade, and how we are thinking about portfolio construction in a market increasingly dominated by AI infrastructure, mega-cap technology, semiconductors and data centres.
AI is likely to be transformative. But history shows that when capital floods into one theme this quickly, returns often compress and risk gets mispriced. The question is not whether AI changes the world. The question is who actually makes money, and at what price.
“The biggest question will be, in three to five years’ time, what the return on investment actually looked like.”
– Chris Scarpato
That caution is not a rejection of AI. It is a recognition that the obvious trade is often not the best one, particularly when expectations are already high and valuations leave little room for disappointment.
Instead, Alvia is looking beyond the headline winners and focusing on businesses with resilience, pricing power and clear earnings support.
That includes energy producers benefiting from higher commodity prices, infrastructure businesses with contracted cashflows, software and data platforms using AI to enhance their business models, healthcare names that have been left behind, and the commodities needed to power and build the next wave of infrastructure.
On the scale of future energy demand, Chris noted:
“The energy demand of these data centres is huge… and the grid isn’t ready for it.”
The article also covers several companies Chris discussed as part of this broader thinking, including Woodside Energy, Aurizon, News Corp, ServiceNow, Constellation Software, CSL, Ramsay Health Care, ResMed, Deterra Royalties and Mineral Resources.
It is not anti-AI.
It is anti-hype.