As the AI boom accelerates and share prices surge, many investors are making the same costly mistake — confusing excitement with enduring investment quality.

AI is real.

It is powerful.

And it is already changing the way businesses operate.

That combination makes it dangerous for investors.

When share prices surge and headlines turn breathless, a familiar pattern emerges. Investors feel pressure to act quickly, fearing they are being left behind as “everyone else” gets rich. Analysis gets replaced with urgency. Process gives way to momentum.

This is how investors end up jumping on the train at precisely the moment when risk is rising, not falling.

At Teaminvest, we have seen this movie before. The theme changes over time, but the behaviour does not.

When excitement overrides thinking

AI has sparked a global investment race. Companies are committing extraordinary sums to data centres, chips, power, cooling, and infrastructure. Markets reward the ambition. Share prices rise. Confidence builds.

The danger is assuming that rising prices confirm rising investment quality.

In reality, one of the most important questions investors should be asking right now is simple:

Is this business becoming more capital intensive?

Many of today’s most admired companies were once capital light. They grew without needing much additional money to expand. That made it easier to deliver strong, consistent returns to shareholders.

AI is changing that. As businesses race to secure computing power and scale faster than competitors, many are spending far more capital to grow than they ever did before.

That shift matters far more than most investors realise.

Why capital intensity matters (in plain English)

Wealth Winners need consistently high Return on Equity (ROE) and Return on Capital (ROC).

Think of it this way:

• ROE measures how well a business turns shareholders’ money into profits
• ROC measures how well it turns all the money it uses — equity and debt — into profits

When a business needs very little capital to grow, those returns are easier to maintain.

When a business needs more factories, more infrastructure, more equipment, or more debt just to stand still, the maths becomes harder.

The reason is simple. The more money tied up in the business, the harder it is for each dollar of profit to produce attractive returns. As capital requirements rise, the hurdle gets higher every year.

This is why capital intensive businesses rarely become long-term Wealth Winners — and why previously capital light businesses can quietly lose their edge when their models change.

The FOMO phase is often the riskiest

Markets have a habit of rewarding spending before they reward results.

In the early stages of an investment boom, capital flows freely. Scarcity stories dominate. Shortages are framed as permanent. Growth forecasts stretch further into the future.

This is when investor FOMO peaks.

Prices move first. Analysis comes later.

The risk is not that AI fails. The risk is that investors stop asking whether the returns on all that spending will justify the enthusiasm. Rising capital intensity can reduce flexibility, pressure returns, and increase the chance that today’s “sure thing” becomes tomorrow’s disappointment.

This is not a prediction. It is a pattern that has repeated across industries and decades.

Discipline outlasts excitement

We do not invest by chasing themes or trying to be early to the next big idea. We focus on process.

That process forces us to slow down when markets speed up, and to ask uncomfortable questions when others feel most confident:

• Is capital intensity rising or falling?
• Are returns becoming easier to sustain, or harder?
• Is growth being bought with discipline, or with ever-increasing spend?

These questions are not exciting. They do not trend on social media. They do, however, protect capital.

AI will continue to reshape the economy. Some businesses will thrive. Others will struggle under the weight of their own ambition. The difference will not be the technology they use, but the economics they maintain.

Over decades, investors who stick to what works — discipline, patience, and deeper thinking — tend to outlast those who confuse rising prices with lasting value.

That has always been the Teaminvest way.