Key Takeaways
- • Brian Kersmanc of GQG Partners exited major technology stock exposure more than a year ago, citing overblown artificial intelligence enthusiasm and challenged by low-cost competitors like China's DeepSeek, positioning the fund ahead of current tech sector underperformance in 2026.
- • The Goldman Sachs-distributed GQG Partners International Opportunities fund has rebounded from weak 2025 rankings to top-performer status in early 2026, driven by reallocated capital to utilities and consumer staples sectors.
- • Kersmanc remains skeptical on hyperscale cloud providers, projecting that rising capital expenditure requirements combined with intensifying competition will compress margins for firms including Amazon Web Services and newer entrants as AI computing service pricing pressures intensify.
- • Market dynamics have shifted materially: while technology firms collectively face hundreds of billions in infrastructure commitments this year, tech-heavy indices have begun underperforming the broader market as investors increasingly scrutinize the sustainability of debt-backed AI infrastructure expansion and its return generation capability.
- • Investor scrutiny now extends to fundamental questions around pricing pressures in memory chips and cloud computing, reflecting broader skepticism over whether rapid AI-related capital deployment can justify elevated valuations and debt levels.
Summary
Brian Kersmanc's early exit from major technology stocks at GQG Partners is delivering measurable performance benefits in 2026, validating a contrarian positioning made over a year ago. Kersmanc reduced tech exposure after concluding that enthusiasm surrounding artificial intelligence had become materially overstated, partly influenced by the emergence of lower-cost AI offerings from China's DeepSeek. While this underweight stance initially cost the funds significant performance during the technology-driven rally of 2025, the subsequent market rotation has proven vindicated.
The Goldman Sachs-distributed GQG Partners International Opportunities fund has climbed from weak 2025 performance rankings into top-performer territory through the first quarter of 2026. This turnaround reflects a strategic reallocation of capital away from traditional technology stocks into more defensive sectors. The fund has increased allocations to utilities and consumer staples, positioning it to benefit from the current market broadening away from concentrated technology exposure.
Kersmanc's skepticism toward technology remains pronounced, particularly regarding hyperscale cloud providers that dominate AI infrastructure buildout. He contends that capital expenditure demands are escalating sharply while profitability faces mounting headwinds. The core thesis centers on margin compression driven by intensifying competitive dynamics; as more participants enter the AI computing services market, pricing pressure will intensify, potentially eroding returns for established players like Amazon Web Services and well-capitalized newcomers alike.
This perspective aligns with emerging investor concerns around the sustainability of the AI-driven infrastructure spending cycle. Despite collective commitments of hundreds of billions of dollars to data centers and advanced chips this year, tech-heavy market indices have begun underperforming the broader market. Institutional investors are increasingly questioning whether rapid, debt-backed expansion of AI infrastructure can generate adequate returns to justify current valuations and capital deployment levels. Pricing pressures across memory chips and cloud computing services have become focal points in this reassessment of AI infrastructure profitability.
The Goldman Sachs-distributed GQG Partners International Opportunities fund has climbed from weak 2025 performance rankings into top-performer territory through the first quarter of 2026. This turnaround reflects a strategic reallocation of capital away from traditional technology stocks into more defensive sectors. The fund has increased allocations to utilities and consumer staples, positioning it to benefit from the current market broadening away from concentrated technology exposure.
Kersmanc's skepticism toward technology remains pronounced, particularly regarding hyperscale cloud providers that dominate AI infrastructure buildout. He contends that capital expenditure demands are escalating sharply while profitability faces mounting headwinds. The core thesis centers on margin compression driven by intensifying competitive dynamics; as more participants enter the AI computing services market, pricing pressure will intensify, potentially eroding returns for established players like Amazon Web Services and well-capitalized newcomers alike.
This perspective aligns with emerging investor concerns around the sustainability of the AI-driven infrastructure spending cycle. Despite collective commitments of hundreds of billions of dollars to data centers and advanced chips this year, tech-heavy market indices have begun underperforming the broader market. Institutional investors are increasingly questioning whether rapid, debt-backed expansion of AI infrastructure can generate adequate returns to justify current valuations and capital deployment levels. Pricing pressures across memory chips and cloud computing services have become focal points in this reassessment of AI infrastructure profitability.
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