We Asked T. Rowe's $8 Billion Tech Manager Why We Are in 1998 — And Why Software Is in Trouble

T. Rowe Price technology portfolio manager Dom Rizzo joins Jack Forehand and Kai Wu to break down the AI investment cycle, hyperscaler capital spending, semiconductor demand, and why the recent tech selloff may look more like 1998 than the end of the boom. They discuss AI return on investment, OpenAI and Anthropic, open versus closed models, financing the data center buildout, the future of software, labor productivity, and how to construct a global technology portfolio.
Topics covered
• Why Dom sees similarities between the 2026 semiconductor correction and the 1998 selloff

• Why hyperscaler AI CapEx could accelerate from already historic levels

• What cloud revenue growth and operating margins say about AI return on invested capital

• Why end-user productivity is the key test for sustainable AI demand

• Open-weight models versus frontier labs and where AI economic value may accrue

• Why chips, memory, logic semiconductors, TSMC and ASML sit at critical points in the AI value chain

• How equity, debt and operating cash flow could finance the next stage of the data center buildout

• Why semiconductors remain cyclical even in a structurally capital-intensive AI boom

• Why AI agents could turn traditional enterprise software into data pipes

• AI productivity, labor displacement and the case for faster GDP growth

• How Dom thinks about technology portfolio construction, risk factors and global stock selection

Timestamps
00:00 AI, the tech correction and the 1998 comparison
04:07 Why the AI capital spending cycle may only be halfway
12:33 The real test for AI demand: end-user ROI
17:00 Why frontier models may capture most of the economic value
21:23 Where the biggest AI moats and profit pools could emerge
28:12 Financing the AI buildout with equity and debt
36:03 Are semiconductors in a supercycle or still cyclical?
41:43 What AI agents mean for traditional software companies
46:03 AI productivity versus labor displacement
51:01 Building a portfolio for a technology revolution
56:06 Global tech opportunities and Dom's stock-picking framework
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No information discussed in this podcast should be construed as investment advice. Securities discussed may be held by the hosts and guests, their firms or their clients.