Northern Trust Corporation’s management said investors should expect artificial intelligence to “stumble and grow” as it reshapes markets, arguing that recent disruption in software stocks reflects overblown fears that AI will eliminate many enterprise software firms. The firm noted tech valuations look stretched but said fundamentals and earnings growth remain supportive, citing a technology-sector PEG ratio around 2.2 versus about 2.5 during the late-1990s tech bubble. It also highlighted uncertainty over whether massive “hyperscaler” spending—forecast at more than $600 billion in 2026 data-center capex—will generate adequate returns, urging careful security selection over broad market exposure.

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