Top strategist thinks the Federal Reserve interest rate hike won't fix this huge earnings risk

The explosive and persistent memory chip price inflation triggered by the AI boom won't be brought under control by the Fed's first rate hike since 2023. And that's why it represents a key earnings risk to watch in 2027, warned closely followed Wall Street strategist Venu Krishna at Barclays on Thursday. Krishna said his work continued to point to rapidly expanding compute requirements as training and inference demand scales, thereby requiring ever more memory chips from an already limited supply. "Recent commentary from some of the largest memory buyers suggests that higher cost assumptions are starting to spill over into next year," Krishna said.