Global stock markets, riding high on AI euphoria at the start of 2026 may be disregarding one of the biggest threats: A surge in inflation driven partly by the tech investment boom; warn analysts. According to a report in Reuters, the US stock indexes, where seven biggest technology companies (called Magnificent Seven) made double-digit gains in 2025 to hit record highs as exuberance about AI. For those unaware, the Magnificent Seven stocks are a group of high-performing and influential companies in the US stock market: Alphabet, Amazon, Apple, Tesla, Meta Platforms, Microsoft, and Nvidia. In the world of finance, the Magnificent Seven are a group of seven high-performing, influential stocks in the technology sector. The name comes from a 1960 John Sturges Western film, “The Magnificent Seven,” depicting a powerful group of seven gunmen.Analysts are reportedly worried that multi-trillion-dollar race by so-called hyperscalers like Microsoft, Meta and Alphabet to build new data centres is an inflationary force, because of the rate at which these projects are gobbling up energy and advanced chips. “The costs are going up not down in our forecast, because there’s inflation in chip costs and inflation in power costs,” Morgan Stanley strategist Andrew Sheets told Reuters.In fact, the stock markets have already shown some early signs of nerves about rising costs and potential AI over-spending. Sharing the worry, Julius Bendikas European head of economics and dynamic asset allocation at Mercer, said, “What keeps us awake at night is that inflation risk has resurfaced.” Mercer manages $683 billion of assets directly and advises institutions running a combined $16.2 trillion.

Deutsche Bank analysts’ warning on AI spend

Deutsche Bank sees the scale of capital expenditure (capex) investment going into AI as gargantuan. The Bank expects AI data-centre capital expenditure to reach as much as $4 trillion by 2030 and the rapid rollout of these projects could cause supply bottlenecks in chips and electricity that make investment costs spiral, the bank’s analysts warned. According to Deutsche Bank, hyperscalers cumulative spend of $4 trillion on AI data centers through 2030 is more than the U.S. government’s moon-landing program in the 1960s: “10x [the] inflation-adjusted cost of Apollo programme with no guaranteed return.“You need a pin that pricks the bubble and it will probably come through tighter money,” said Trevor Greetham, head of multi-asset at Royal London Asset Management. He said that while he was holding on to big tech stocks for now he would not be surprised to see inflation booming worldwide by the end of 2026.