Sep 25, 2026 · 44 min
Dent sees room for equities despite late-cycle risks
Why T. Rowe Price’s Iona Dent believes it’s not time to leave the equities party yet
The episode tests whether investors should stay exposed to expensive markets while AI spending, geopolitics and rising yields reshape the opportunity set.
- 1Strong earnings and durable growth opportunities can justify staying invested despite elevated valuations and higher bond yields.
- 2AI infrastructure may offer broader opportunities than headline model competition, spanning memory, semiconductors, networking and power.
- 3Emerging markets require country-by-country analysis, while geopolitical and governance risks can overwhelm even exceptional businesses.
Don't miss
Dent chooses Welltower as her hypothetical five-year stock pick, prioritizing durable earnings growth and visibility over an AI name.
The brief
Iona Dent of T. Rowe Price argues that investors need not leave equities simply because valuations and bond yields are elevated; strong earnings and durable growth still matter.
Her late-cycle approach is neither complacent nor defensive: stay invested, identify potential exits and keep a list of holdings that could protect capital when conditions change.
Dent sees AI’s investment case extending beyond model headlines. Computing intensity, infrastructure demand and the eventual rise of agentic AI could reshape opportunities across the technology stack.
Emerging markets are not one trade: Taiwan and Korea offer AI exposure, while Brazil and India present different combinations of domestic demand, currency and structural growth.
The sharpest lesson comes from Russia, where Tinkoff’s business quality could not overcome geopolitical and governance risks. For a five-year holding, Dent instead chooses Welltower.
What was said on this episode
31 statements · 21 positive · 6 negative · 1 mixed · 3 neutral
Strong growth enables the Fed to prioritize inflation through rate hikes.
“My view is that growth is now strong enough that they can prioritize inflation, and that is why we're seeing the hikes coming through.”
Listen at 4:02
Earnings will rise faster than valuation de-rating from higher discount rates.
“I think for me, earnings are going to keep rising faster than the de-rating we could see as a result of slightly higher discount rates.”
Listen at 5:52
Passive index investors may be unable to pivot and remain concentrated in technology.
“I actually think it's a pretty risky thing for those who are just sitting on kind of passive, passive indices here, because when the time comes to pivot, you're going to be not able to and you're going to be stuck with a bunch of tech companies.”
Listen at 7:03
Semiconductor valuations are falling despite strong earnings growth.
“The semis are actually ironically derating because of the level of earnings growth they're putting up.”
Listen at 7:28
Companies trading at 100 times revenue historically produce poor outcomes.
“We've done a study on companies that trade on 100 times revenues historically, and honestly, it's never a good outcome.”
Listen at 7:51
Broad market valuations are not egregious and remain sensible versus the dot-com era.
“when you look at the broader market and valuations, you know, we're actually not at egregious levels in any sense and actually quite sensible versus a lot of the dot-com where you're valuing on eyeballs.”
Listen at 9:07
The investment team should remain invested rather than exit equities early.
“We don't want to leave the party early.”
Listen at 9:51
The team is currently maintaining equity exposure.
“we're, we're, you know, holding on for now.”
Listen at 12:29
Current markets resemble 1999 more than the 2000 crash period.
“for now, you know, we think it's more 1999, uh, that we're not in 2000.”
Listen at 13:15
Hyperscaler AI capital expenditure can continue increasing if productivity and returns materialize.
“I actually think it can keep going higher if the productivity benefits come through and if the returns come through.”
Listen at 14:58
AI infrastructure will remain compute-constrained until approximately 2028.
“we will still be compute constrained until a lot of supply comes on. In our view, that's nearer 2028.”
Listen at 16:02
AI infrastructure companies will need to issue additional debt or equity.
“a lot of these companies are going to have to issue more debt, uh, or and/or equity.”
Listen at 16:21
AI requires greater regulatory involvement and a stronger regulatory framework.
“I do think there's a bit of a kind of regulatory, um, and more regulatory involvement. We need more of a regulatory framework.”
Listen at 18:59
AI development and capital expenditure will not slow because of safety concerns.
“Absolutely not. And you saw Trump come out and say, look, a lot of this is geopolitics. We cannot slow down. We have to win this.”
Listen at 19:14
AI development will continue without slowing after regulatory and safety concerns.
“I feel like there's no way we're slowing down off the back of this.”
Listen at 19:24
The AI capital expenditure cycle will accelerate next year.
“right now, given our view on CapEx cycle continuing to kind of accelerate actually next year”
Listen at 22:56
CPUs and optical components offer greater investment opportunity than memory.
“On the other hand, you have CPUs and optics that are still mid-single digit of the CapEx budget. So that is where we're more constructive”
Listen at 23:39
AMD and Intel shares have further upside.
“I think they've got further to run.”
Listen at 24:48
AI is currently inflationary because it competes for scarce resources.
“Today, yes, it's probably inflationary.”
Listen at 25:34
AI will make intelligence dramatically cheaper over the long term.
“But long term, I think intelligence becomes dramatically cheaper.”
Listen at 25:45
AI-driven productivity expansion will help keep inflation under control.
“If the supply side of the economy pushes out, that is actually, you know, good for inflation. That is actually going to keep inflation under control.”
Listen at 26:06
AI-driven price transparency will narrow price differences between Amazon and Walmart.
“the differential between Amazon and Walmart, for example, I think is going to come down too.”
Listen at 26:43
Software companies vulnerable to AI-native replication are unattractive investments.
“If an AI-native startup could replicate what the software company is doing today, then it's not of huge interest to me.”
Listen at 27:50
Software companies successfully shifting to consumption pricing may perform adequately.
“companies that succeed successfully pivot to that new monetization model probably will be able to do okay from here.”
Listen at 28:33
Infrastructure and build software are more attractive than CRM software.
“we're in general a lot more constructive on kind of infrastructure software and build software than, uh, CRM software”
Listen at 28:42
Semiconductors are more attractive than software within technology.
“But for us within tech, we're still more bullish on semis than software for sure.”
Listen at 30:03
Welltower is the preferred five-year single-stock holding.
“I would do Welltower”
Listen at 40:52
Welltower has an exceptionally attractive senior-housing supply-demand outlook.
“I think the supply-demand setup is exceptionally attractive.”
Listen at 41:18
Welltower is currently growing earnings above 20%.
“Welltower is already growing earnings at more than 20%.”
Listen at 41:48
Welltower’s technology platform may expand its margin opportunity.
“I think that can potentially extend the margin opportunity for them as well.”
Listen at 42:36
Welltower offers substantially greater earnings durability and visibility than many stocks.
“I think think it's substantially higher in this stock than many others.”
Listen at 42:48
Statements are attributed to the speaker as said on the episode and reflect their view at the time, not PodLume's. They are not advice.
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