Jeremy Siegel Sees Potential Winners Beyond AI if the Boom Weakens

Wharton professor emeritus and WisdomTree senior economist Jeremy Siegel argues that a slowdown in AI investment could benefit bonds and value stocks by easing demand for capital and pushing long-term Treasury yields lower.
Speaking on the October 30 episode of the “Behind the Markets” podcast, Siegel said that if AI spending weakens, lower demand for data centers, processors, networking equipment, and power infrastructure could reduce financing needs and inflationary pressure.
Lower interest rates typically support existing bonds because their fixed payments become more attractive relative to newly issued debt. Falling yields could also make dividend-paying and value stocks more competitive with bonds.
Siegel noted that the S&P Value Index and Russell Value Index recently reached record highs despite a sharp technology selloff. He also pointed to the historical performance of value stocks after the Nasdaq peaked in March 2000, when they gained ground as technology shares declined.
The potential downside remains significant for major AI-linked companies, including Nvidia ($NVDA), Microsoft ($MSFT), Alphabet ($GOOGL), and Amazon ($AMZN), if investors lose confidence in the returns from their large infrastructure investments.
Siegel does not expect a repeat of the dot-com collapse, but has previously warned that an AI failure could trigger a 20%–30% decline in the Nasdaq.
His broader message is that investors do not need to predict the future of AI perfectly. Holding a mix of technology stocks, bonds, and value-oriented investments may help portfolios respond differently depending on how AI spending and interest rates evolve.