CAPEX

looool_k_libtard

Markets telling us to put money into dinosaurs that gain 4% a year instead of AI because oracle fucked up with CAPEX

False_Secret1108

Picture is becoming clearer. 2026 should have another -20% moment but the year will probably still end green. It is all about AI. Without AI capex spending, we would be in a recession right now. You have to ask yourself how sustainable is this spending? Because once these guys start cutting CAPEX, we will see panic

Thefellowang

ORCL still has a positive operating cash flow and investment grade bond ratings - though I think a rating cut is coming. The company just needs to take more measured pace in CAPEX.

MaterialGuy007

GS another one promising increased CAPEX

Thefellowang

Cash on hand $19B Next 6 month operating cash flow $12B (based on Last 6 month operating cash flow $10B) Next 6 month CAPEX $30B (Last 6 month $20B, fiscal year pla $50B) $19+$12-$30=$1 ORCL can either borrow more or cut CAPEX, but it already has $100B debt.

Thefellowang

Based on ORCL's CAPEX plan, by the middle of 2026 it will run out of cash COMPLETELY.

IllustriousLetter898

Now your talking about CAPEX for Whatapp, Instagram, Facebook, Realty Labs.

95Daphne

Apparently CAPEX related, but I was just searching myself. Didn't think we'd get there, but this AVGO move is now as bad, if not even WORSE than ORCL's was. Wouldn't be surprised if it was a 10%+ reversal. Like I said. Expect a big fat 0 from tech for December it looks like.

IllustriousLetter898

Considering META has to train and build Avocado and maintain LLAM, isn’t there CAPEX going over 100 billion? Stuck on the 200 day with institutions shoveling cash as fast as it drops. Anyone see a play?

Quiet_Deer_4887

Which doesn't change CAPEX environment or lack of AI profitability at all. The one thing everybody wants to quietly ignore lol.

ThouOne

NBIS 700% Y/Y growth to 7B-9B ARR, $5B cash to spend on CAPEX, 4 subsidiaries & one of which has the potential to become bigger than the parent company (Avride), lowest analyst rating 13% from current prices with an average of $163. But of course, whatever wall street regards say.

_hiddenscout

Around the free cash flow, it's good to look into why when you see huge jumps. I don't really follow the company too closely, but they did cut some CAPEX as well could be a timing thing of selling more cars because of the timing of the end of the tax credits. Both F and GM also sold more cars than normal around that quarter. [https://finance.yahoo.com/news/tesla-best-sales-quarter-ever-130838579.html](https://finance.yahoo.com/news/tesla-best-sales-quarter-ever-130838579.html)

DiscountAcrobatic356

After a trillion or so in CAPEX they all converge to about the same. No one wins. 

taiwansteez

That’s so interesting I came to the opposite conclusion and see AI as a net threat to their businesses. I agree with what you’re saying about the value of unique data sets for AI models, but I guess my issue is that I don’t see how any of their data is particularly unique. Even in the case that it is super unique the question becomes: Do they have strong enough balance sheets to compete with the mega caps who have endless free cash flow? Will they be able to weather all the CAPEX required to develop their own models? Or are they better off just licensing the data? In any case all these decisions have to be made just be to defend their existing market share let alone worry about growth. I do think that selling on both companies feels overextended and they are probably good for tactical short term longs but long term I’m still dubious of them being growth companies.

Otherwise-Coyote6950

I finally sold that fucking garbage of $NBIS Fuck off to the idiots that made me buy it It won't go anywhere, every rebound is quickly sold off because people are trying to dump it as soon as possible Huge CAPEX so they'll have to dilute a lot in the future, it's correlated to NVDA which is going nowhere lately because of AI bubble and their accounting fraud. OpenAI is blowing up and going bankrupt, Oracle CDS are almost at 2008 levels so they're done, CoreWeave is a fraud, more and more competition from bitcoin miners that are turning to AI infrastructure providers, they'll unprofitable for many years, Google is using TPU so the GPU monopoly is ending, Burry has very convincingly laid out why AI is in a bubble and the US Government has said they won't bail out anybody No wonder the stock has gone down in the last month, AI infrastructure plays are done. Everybody is trying to get out. Fuck NBIS and fuck the pumpers on here and X that are hyping that trash to get out of their position

HugeDramatic

Been doing some more analysis on this… After the debt repayment, Trulieve will have $90M cash left on their balance sheet. The interest expense savings for 2026 is roughly $29M. If the IRS comes knocking for their $616M 280E tax debt in 2026, Trulieve will have less cash on hand for the IRS to immediately demand to satisfy that debt. It’s an interesting strategy… if you owe the IRS a few million that’s your problem, if you owe $616M that’s the IRS’s problem. I feel like Trulieve is hedging more than one risk by paying off their debt early. Their cash flow is very strong with some of the highest margins in the sector, $90M is more than enough to fund CAPEX, and the $29M of interest savings can simply be redirected to start paying the IRS if they lose their 280E legal battle. Overall, I like what they are doing… it gives me more confidence that they can survive and continue to grow in 2026 even without rescheduling or tax reform.

Front-Nectarine4951

More like Announce new technology —> stock pop Cut CAPEX spending—> Stock pop

toydan

can see how that line is drawn less metaverse and to continue on ai CAPEX tbh bullish

not_my_monkeys_

I’m sorry, but that simply isn’t true. LLM’s are fancy autocompletes with a serious hallucination problem that is likely fundamentally unsolvable. Yes, they are a cool technology, yes they certainly have some use cases that add value to human labor. But claiming that they constitute AGI is nonsense. We are nowhere close to being able to plug an LLM into the chair of the average white collar worker and have it perform the equivalent job. And until that is a reality, there is no justifying the trillion+ CAPEX spend that has been committed to AI so far, nor the label “AGI”.

KittyLover-7

Someone just asked in a meeting how much energy is used when we use co pilot Only if you knew Katie, only if you knew the CAPEX we’re throwing at this

Fragrant_Equal_2577

TSMC is a manufacturing services company in an extremely CAPEX intensive industry. They don‘t design own products. They provide part of the enabling technologies for the product companies. The value creation ladder: 0.1x : Raw silicon wafer vendors 1x : Foundry - TSMC 10x: semiconductor product company (ASSP) - AMD 100x system company >1000x hyperscalers - Google NVIDIA is somewhere between a Semiconductor product and a systems company - they have their data center system solution for AI and HPC needed by the hyperscalers. NVIDIAs market valuation today is in the hyperscaler bucket. This sounds a bit high based on their location in the value chain.

Due-Swimmer-5888

Oracle is interesting because of the stock price how much volatility it’s had. It announced an OpenAI deal and soared 40% then got brought back down to earth. AI CAPEX is starting to get people to question these companies in my opinion. Too much debt is getting people nervous and hundreds of billions in commitments are spooking retail and institutional investors.

Yogurt_Up_My_Nose

what if AI just started investing in itself and that's why these companies CAPEX is so high because they can't stop it.

Distinct-Tour5012

GOTTEM yeah these dumb poors AI is fucking awesome and it's going to change everything. Imagine if you got in the back of an uber, but the destination was wrong, so you ask "hey can you fix the destination?" and the driver turns around and says "Whoops! I'll fix the destination now" and now for some reason the car has no tires. You tell the driver, "hey we need tires to make this trip" and the driver says "silly me! I'll fix that now". But now for some reason you're in the drivers seat and the driver is trapped in the trunk. You yell back to the driver, "Hey! You're supposed to be the driver" and you can hear a muffled "My mistake! Let me get back to the front seat" but now for some reason the driver's head is on your body and your head doesn't exist anymore. Fuck yeah. Directly into my fucking veins. Does it make money? No. Is it good? No. So everything is going to be different and these fucking minimum wage dummies KNOW JACK SHIT. Not me though. I'm fuckin SMART. Everything will be DIFFERENT. I used the term CAPEX.

kidike

It’s just physics, Starlink can’t compete with ASTS, bigger antenna equals standard connectivity to any device (think IoT), cars, drones, wearables… Starlink wants to brute force the market flooding the space with thousands of satellites that need to be replaced every 1-2 years, it’s a CAPEX nightmare

Commercial_Deer_7114

Actually, in software in general and in AI in particular, it is a winner-take-all market. Nobody wants an AI that is right 75% of the time when 85% is available. That is what makes it so extremely risky. There was even a paper on this some years back which argued that because it is so costly in the long run to have a weaker AI, it kind of guarantees a long cycle of CAPEX and employment demand as firms will compete to produce, purchasers will shift between models, etc etc. It will consequently also erode the outsized profitability that people are projecting around.

anonymous_sheep1

Was is your take on the AI bubble and how would you position yourself at this point in time if you are a stock picker and manage an equity only portfolio? I was watching a Ray Dalio interview this week where he discussed the AI bubble from 2 angles: 1) what is a bubble: lots of wealth creation from “weak hands” - the public buying equities on leverage instead of strong hands (private holders). 2) what makes the bubble burst: an event that invites a demand for cash ultimately pops the bubble as people need to sell wealth for cash. And leverage is the catalyst that creates panic selling. Burry also compared NVDA to CISCO and argued that the issue about this bubble isn’t earnings but rather an over supply of infrastructure build out (very much like the dot com bubble). But at the same time, I am aware that we are in a rate cut cycle with a dozen other stimulus policies (I think it looks like an early cycle) that makes asset price go up. The K shaped economy is also talked about a lot where hyperscaler CAPEX is the only thing that “matters.” So it’s really hard to say how much longer this craziness can last. Maybe the market rallies another 100% from here and the disinflationary effect of AI really makes earnings catch up to a reasonable valuation and maybe the dotcom bust happens again from the consumer credit breakdown or yen carry trade unwind in the next 2 years. Curious what you think as an institutional investor in terms of what business cycle and how would you adjust allocation amid the near term macro/sentiment tailwind vs longer term structural risk on AI top heavy economy.

raisedeyebrow4891

This is like someone saying that there are huge outflows from tech into healthcare and that healthcare is doing so well this week while over the course of the year tech has outperformed healthcare 5x. What people may or may not realize is that the AI has hat is driving the CAPEX of the hyperscalers is the same AI that is allowing pharma companies to innovate and bring drugs to market faster, safer and more profitable. AI is everywhere and this is only the beginning.

jackflash223

You've absolutely nailed the true source of the AI CAPEX bubble. It's not the chips, it's the Toilet-to-Rack Conversion Ratio or TCR for short.

Lunarisation

I doubt they are even breaking even from a CAPEX vs revenue perspective.

Darth1Football

FWIW - Capital Equipment (CAPEX) spending / budget approval is down for '26 projects. The majority of the ones I'm familiar with deal directly with the consumer. That signals companies are nervous about prospects headed into the new year

maui-shark-fighter

Your thesis is basically Ai is power hungry, buy utility companies. It doesn't work that way. The biggest hole in your thesis is that all these players are going to make money in the Ai race is that you said it yourself. The grid isn't ready. So if it isn't ready how are these players going to make any money if they have to cough up CAPEX to upgrade the Grid? Short answer is: THEY ARENT. Most Ai datacenters are near the source of their power so long transmission lines are needed to distribute this load BECAUSE of said grid. If you look at most of the Ai players they aren't waiting for grandpas utility company to suddenly deploy enough capacity to the grid and transmission. Utility companies are already under scrutiny for this issue and will soon be regulated, by federal, state and local laws. By the time the utility companies upgrade the grid Ai will already be on to the next steps which are using light and silicon instead of expensive power.

touuuuhhhny

I mean low CAPEX doesn't even give justice. They spent 2 Million cash expenses (two!) to generate 5xxM in revenue in Q3. That is batshit insane

No_Cell6708

Shouldn't be surprising. Tons of money is being loaned out for CAPEX. Lower rates = muh economy pumps (ideally) I noticed during COVID that the market makes massive assumptions about where rates are headed and often that ahead of itself. We'll see how it works out this time.

KittyLover-7

They haven’t cancelled NVDA orders so the CAPEX is still there

Geno_2102

Yea that’s an interesting take. AMZN has a history of artificially lowering their EPS by spending loads of cash on investments. Do you not think that this company will eventually turn from a CAPEX heaving company into a company that rewards share holders? Yes not ideal but I see why AMZN is valued higher than Walmart etc.

Geno_2102

Yes definitely! They are the most efficient companies in the world. The flexibility they have to stop CAPEX at the snap of their fingers or keep developing has never been seen before

Desmater

They are, just saying they don't have as solid as FCF as the others. Also their business has more down cycles with advertising. Even though Alphabet also does the same. But they also have other business segments. META at $100 awhile ago, happened for a reason. Also the excess CAPEX into the "Meta Verse."

JimmyInvestor

Great question, and not basic at all. This is actually one of the core dynamics of how markets process information. **i) No one understands a company better than its own CEO and management team.** They have real-time visibility into demand, supply chain, customer orders, backlog, pricing and margins. If a management team has a long track record of credibility, the market listens. That’s the key: **credibility**. **ii) When a highly credible CEO sets expectations, it becomes an “anchor” for the market.** Investors use management’s guidance as the baseline for their own models. Better guidance → better visibility → lower perceived risk → higher valuation. NVIDIA is a perfect example: Jensen Huang has built an almost flawless record of *under-promising and over-delivering*. When he says demand is strong next quarter, the market believes him, not because he’s “selling a story,” but because his track record supports it. **iii) What prevents companies from simply lying?** Several things: \- SEC regulations (you cannot knowingly give misleading guidance) \- Legal liability \- Reputational damage \- Higher cost of capital \- Loss of investor trust \- Stock collapsing once reality catches up Bad companies *did* overpromise in the dot-com bubble, and the market punished them brutally once results failed to match the narrative. **iv) Ultimately, forecasts only matter if they’re backed by fundamentals.** NVIDIA’s demand isn’t based on “hope”, but supported by hard data: order visibility, multi-year hyperscaler CAPEX commitments, and supply constraints. That’s why the market respects their guidance. So yes, companies can talk. **But only the ones with credibility + execution + fundamentals actually move markets when they speak.**

mdh1119

I think there will be one last big rally. \-NVDA's earnings by all means appear to be good but if they are cooking the books somehow will be revealed with time \-Michael Burry's upcoming blog (seems he wants to take Hindenburg's place and just write short reports?) will probably detail this further But the narrative of CAPEX growth and everything relying on it, like hydrogen fuelcell companies, coreweave etc will probably go up a bit longer. If it turns out the NVDA critics and Burry are right, we should know in 1-2 months.

Nepalus

They fully depreciate over 3-5 years. Big problem is that NVDA is going to say that if you don't have their new chip, you're basically a loser in the AI space and won't be able to compete. Then every Cloud Provider and AI company is going to have to make a choice about billions in new CAPEX or having dated tech.

Xdddxddddddxxxdxd

Where did you all get the talking point that CAPEX = bad or that demand = revenue? Thats not how these software companies work. Theres endless examples of companies that burned tons of cash and ended up becoming highly profitable.

Marko-2091

Well... if you look at the CAPEX needed by Open AI and its actual revenue you will realize that the opinion is not based on "nothing"

Brawmethius

"There's a lot of talk about an AI bubble. From our vantage point, we see something very different." - Mr. Leatherjacket Daddy Of course you do. You are paid in cold hard cash for hardware that others need to profit on, great place to be, the best place to be even. While those buying your products are giving you cash and giving investors IOUs. People are concerned that investors will stop taking IOUs which mean there wont be cash flowing in for CAPEX.

typeIIcivilization

And who says they are not making profits from AI already? To be very clear here, I know that this stance is from the mainstream media and is why you are repeating it here. There is no direct evidence one way or another. But we have indirect evidence of profitability already because of all of the AI layoffs and continued CAPEX. If you have specific data sources to show that the hyperscalers aren’t profiting from AI, I’d love to see it.

Worth_Quantity1953

I punched all the numbers in ChatGPT for a read. Here’s what it gave me: ✅ 1. Labor Market Summary (Your Numbers vs Forecast) Headline NFP: 119K (forecast 50K) → Hot Private NFP: 97K (forecast 40K) → Hot Unemployment Rate: 4.4% (forecast 4.3%) → Softening Signal Wages MoM: 0.2% (forecast 0.2%) → Perfect / Disinflation Wages YoY: 3.8% (forecast 3.7%) → Slightly hot but manageable Participation Rate: 62.4% (forecast 62.3%) → Positive (adds supply) Average Weekly Hours: 34.2 → Flat (no recession stress) ⸻ 🟧 Sector Breakdown • Government Payrolls: +22K (forecast -10K) → boosted headline • Manufacturing Payrolls: -6K (forecast -4K) → still contracting • Private payrolls: 97K → This is the real economy number Private at 97K = labor market not weak, not overheating. ⸻ 🟨 Philly Fed (This is the inflation risk) • Headline: -1.7 (forecast -1) → soft but expected • New orders: -8.6 → Demand weakening • Employment: 6 → Mild expansion • CAPEX: 26.7 → Very strong capex • Business conditions: 49.6 → Huge jump → this is bullish • Prices Paid: 56.1 (previous 49.2) → THIS IS THE PROBLEM Prices Paid rising above 55 = inflation input pressure. This can push yields up intraday. ⸻ ⭐ 2. What This Means in a Single Sentence The labor market is still too strong to justify a cut, unemployment is rising just enough to avoid fear, and wages cooled — but Philly Prices Paid rising is the only hawkish piece. This is not recessionary. This is not dovish. This is not enough to reverse NVDA’s tailwind. It is exactly the kind of report that supports a December pause, not a cut. ⸻ 🟦 3. Market Reaction Call Risk-On or Risk-Off? → Mild Risk-Off at First, Then Stabilizes Here’s why: ➤ Bearish elements: • NFP hotter than forecast • Private payrolls strong • Philly Fed Prices Paid (inflation) • Unemployment rate at 4.4% (highest of the cycle — could spark a minute of fear) ➤ Bullish elements: • Wages cool (0.2%) • Participation improved • Hours steady • Philly Fed business conditions + CAPEX very strong • NVDA’s beat provides a major cushion to tech • Rising unemployment = Fed stays paused This will NOT break the market. It’s more of a “higher-for-longer but soft landing” print. ⸻ 📉 Yields Reaction (Expected) • 2-year: Slightly up • 10-year: Mild reaction up because of Prices Paid • Not enough to crush QQQ because NVDA’s print dominates tech sentiment ⸻ ⚡ 4. December Fed Meeting Impact This report reinforces a pause: • Unemployment rising → Fed won’t hike • Jobs still healthy → Fed won’t cut • Wages cooled → inflation trend still good • Prices Paid rising → Fed stays cautious Net result: December = Pause. ⸻ 🟩 5. Impact on Your Risk-On Environment Risk-on intact but with morning volatility. • NVDA is still the primary market anchor today. • This jobs report does NOT challenge the AI cycle. • It does NOT resurrect recession fears. • It does NOT force the Fed to hike. • It’s mildly bearish for cyclicals, neutral for tech, supportive for “pause” narrative. If anything: NVDA’s beat + this report = soft-landing with strong tech leadership.

Deicide1031

I have no doubt the technology will improve however All this CAPEX / R&D is not cheap and from my end it looks like many are struggling to monetize it. At the end of the day there needs to be a return buddy, that’s why we’re all here.

sharkykid

1. that's why I'm not buying NVDA puts and still have long positions on ~~shitcoins~~ $OPEN 2. I'm not entirely convinced lower rates are going to prevent the chain from happening. Quant Easing is reactive and will take time to reverse dropping employment and will make inflation worse faster than it makes income better, both of which are net negative to discretionary income. More importantly, how many of the layoffs are from realized prod gains from current AI models? There are real 10x SWEs now that can write code at literally 10x the speed of 2020 SWEs. There are call centers that are never reopening because ops have successfully been centralized. There are warehouses that won't even need to hire for holiday rushes because $SYM has robots that can work 24/7. If the layoffs are from decreased CAPEX budget, totally get what you're saying. But if the layoffs are from improved OPEX spend control without any major side effects, then QE is only going to make inflation worse while not improving spending power.

sharkykid

At a macro level, let me explain the thesis you seem to be missing: \> Economy gets fucked \> Consumers have less discretionary income \> Companies return on ad spend plummets \> META, GOOGL revenue plummets and first thing to go is CAPEX (read, GPU spend) \> NVIDIA revises forecasts down all of a sudden your forward P/Es don't look so reasonable. There's a reason FPE is forward and not realized, that's the threat Anyways, I'm not retarded enough to buy NVDA puts (COF, ALLY, MGM, LUV puts are very on the table though) but your prices are not extreme theory misses the primary threat vector

scroto_gaggins

Yeah I work for Amazon but it’s pretty easy to see the trend. CAPEX is increasing a lot so other costs need to go down. It’s happening all across big tech as well.

BoggedDown4Life

this would only matter if revenue was wildly different than AR. Plus It's only an issue if one of the hyper scalers decreases CAPEX (thus hitting NVDA's balances sheet), which is the primary issue critics bring up... Twitter is down the hall and to the left

scroto_gaggins

Layoffs aren’t because AI is replacing workers but they’re still related to AI spending. Companies are spending a lot more on CAPEX and need to reduce elsewhere. It’s pretty easy to see the correlation (Amazon for example)

FullCopy

NVDA is selling overpriced GPU’s. CAPEX and depreciation is a bitch.

trevosaurusrex

I am an HVAC engineer at a different large company so I know for sure that big companies care more about CAPEX than they do OPEX no matter how sustainable a company they are if they’re a public company because the less they spend, the higher their margins are for that quarter. Depending on the climate, cooling towers are going to be more efficient anyways.

Resident-Tumbleweed9

The math ain’t mathing. They’d have to extract 34 dollar PER MONTH per every iPhone user IN THE WORLD (short- mid term) to make money a 10% RETURN on the 5 trillion going into CAPEX. ROI is not guaranteed to even break even … , and these GPUs need to be upgraded every 2-3 years, but they are depreciating them at a 8-10 year cycle. Thats deception, if they did it right, their EPS would TANK. Not to mention debt financing on a non ROI investment, circular financing, power needs, and volatile nature of the whole technology. TLDR: They are just hoping things workout, it’s WAY LESS uncertain to be a profitable investment than most (or even they) thought.

Charming_Raccoon4361

they hired CHIEF CAPEX officer

KittyLover-7

I just don’t see us crashing till plans to decrease CAPEX and data centres being scaled back come out

Sea_Pear5265

That might be true in the long term, but players like AMZN, META, and GOOG can afford to make that gamble. These are AA rated companies who can borrow at cheaper rates that the US Treasury can. We won't know for a while if their debt fueled CAPEX bet pays off or not. In the short to medium term, huge continued demand from those companies for the products made by NVDA, TSM, ASML, and WDC figures to only get stronger on the back of these bond offerings.

Sea_Pear5265

Maybe I'm stupid, but I don't understand why the consensus seems to be that META, Oracle, and Amazon issuing massive amounts of bonds to fund data center CAPEX is bearish for AI writ large. Won't that money be just be used to purchase more TSM and NVDA chips? It should be bullish for chip makers and ASML and data storage companies like STX and WDC.

ScheduleSame258

You need Michael Burry to point out AI CAPEX is at record highs?

hardlymatters1986

Customerd aren't paying for it, CAPEX is for now.

TheAmigoBoyz

Sorry but no one is saying Google or Apple is going bust if the bubble pops. Of course they will still remain here, but the market will see a significant correction, which is the concerning part . Also, you have not addressed the fact that there is a total disconnect between revenue and comitted earnings. How do you see OpenAI financing 1+ Trillion in spending commitments? They have 13bn in revenue and are allegedly in negative profit. In my opinion, the problem is that we are in a rat race situation where the large players are spending so much CAPEX to become first in the market/ahead of competition, but I don’t see how they could ever monetize their product enough for the spending to be worth it. Sure, OpenAI could hike up their prices by 100x, but then everyone will just switch to Google who can afford to run it at low costs, using its Ad business cashflows to subsidize its AI business. OpenAI cannot do that, as they don’t have any cash generating businesses on the side. Google can then keep costs low until it becomes unprofitable for OpenAI operate, at which point they will go bankrupt. If Google and the other LLM pure players follow and also push price increases, then we will probably have some cheap Chinese model that people will switch to. The result will be the same. In my opinion, we are in a market that is very competitive, and as models become so similar the only way they can differentiate is on costs. When costs are kept low by some players, this will damage the ROI. People/investors will slowly realize there is not the same ROI as expected, and the market will crash. Curious to hear your take on this

MCB1317

If they slow their CAPEX spending, they will. If they continue to pour that kind of money into AI when (unlike other Mag7) they have no clear path to monetize it other than improving ads, doubtful.

Inca-Vacation

I bought ChAIves, they go great with CAPEX.

michahell

7-8 years!? more like 5-6 and that’s what big tech report themselves which might be BS (according to Burry for instance). I tend agree. With the current frenzy the CAPEX seems to point more to a 3-5 year cycle.

andytobbles

I’m not assuming this bull market will never end, I’m saying that the fundamentals of this “bubble” if that’s what you want to call it are still sound. As it begins to lose those fundamentals and NVDA trades at 80-90 P/E I will admit it’s a bubble. Also typically when everyone is calling it a bubble it isn’t one, it’s when everybody thinks it will never end is when it becomes one due to “inflation” or some other rationale that elevates stock prices. META is leading the pack in CAPEX spend and will continue to in order to build out data centers. They are seeing returns on AI due to AI focused ads to show people what they’d be further interested and openly said that in their last earnings call? You’re just spewing bullshit out of your ass. The AI momentum is just taking a breather after running up 36% from April. META will be over 1000 at some point next year and you can take that to the bank. Set yourself a reminder or whatever it is you need to do to prove a point because so far your argument is flawed.

knightsone43

I wouldn’t want to be long any AI names right now. You can tell they are finally being punished for the increase in CAPEX with little revenue generation to show for it. Obviously it will get hot again soon but I think it goes lower sooner than it goes up.

Then_Helicopter4243

High CAPEX plus Burry throwing shade on accounting, definitely a risky setup, but at least the strong IV gives you some room to squeeze income from calls.

Redtyde

Have to post this because its hilarious. Quantum Computing Inc posts recent earnings results: * Revenue - $384,000 (yes, thousand) vs $101,000 expected * $2.4 Million Net Income Loss * $1.25billion total capital raised through stock issuance (congrats baggies) Stock up 14% post market to $2.37b market cap Its a grift for the ages, management have extracted generational wealth for themselves with less annual revenue than your local Kebab shop. QUBT management are going to do sweet fuck all for 10 years, invest in nothing, pay themselves bonuses out of their little baggie haul and ride off into the sunset. So funny that they aren't even pretending to scale or build anything. How are they building out 2 "quantum" "fabs" with $870,000 (again, thousand) of capex? Lmao. ***No CAPEX guide***. Please god kill this shit company, surely this counts as actual fraud?

JesusBoughtPuts

Haha no, IREN balance sheet risk is different from other data center plays because they used their bitcoin profits to buy their CAPEX. NBIS and CRWV. Took out loans

TimeTravelingChris

I didn't say it was the same. Just a comment on CAPEX.

PotatoTrader1

A few things about what hes saying dont make sense to me 1. I did my own [research ](https://pocket-quant.com/dashboard?share=019a82f2-366a-7a96-99e4-6488486eaed2) and couldn't find anything like what he said about these extensions 2. I don't think you get to 700M MAU without having something legitimately worth hundreds of B or even a few T$$. Also I use the coding agents for work daily and they're honestly really helpful depending on what youre doing 3. So what if the hyperacalers are spending to much on chips right now. They've printing cash and have nothing else to do with it. If the AI bubble bursts they reduce CAPEX and put boat loads more to the bottom line its a win win

TimeTravelingChris

My THEORY is that TSLA figured this out years ago. This is why they essentially pump out the same vehicles for years with virtually the same hardware. Can't have CAPEX go up for new models if you never invest in new models (except for the CT which... YIKES).

Numerous_Priority_61

Ok, I do understand depreciation I run a small business. I buy a camera and I depreciate it either over 5 years or immediately, depending on tax considerations. Specifically, I run a photography business. I have a Sony A9 that was $4500 and I bought it 5 years ago. I depreciated it $900 over 5 years. Lowered my taxable income each year. After 3 years of owning that A9 I bought a Sony A1 for $6500 that is better in every way. I still use the A9, still benefit from its depreciation, but also take advantage of the enhanced capabilities of the A1, and I get to depreciate both, at the same time. But I guess my problem with his thesis is that who really cares how they depreciate? If I am one of the tech companies I need the best NVIDIA hardware now, today, and I need the best chips they offer. That will not change next year or in 5 years. I can depreciate an H100 chip over a 5-6 year life cycle, as long as the benefits I get from hosting whatever lower end task it is performing outweigh my energy/hosting costs. In three years if I buy some new "H500" chip, can't I just repurpose my H100's, still continue their depreciation, while also starting a new depreciation cycle for my new "H500" chips? My point is I get depreciation. But isn't the much larger and more pressing issue, if these companies can generate the cashflows to offset their CAPEX on all of these purchases? And not their methods of depreciation? And I do not see him making that argument, which I think would be more informative or is more up for debate.

Beautiful_Lettuce603

The transition from low CAPEX high ROIC known business models to high CAPEX and unknown ability to monetize is what can be worrying indeed.

AltruisticPie1544

I don't know if i'm allowed to link it but you can look up Semi Analysis' recent article titled "Microsoft's AI Strategy Deconstructed - From Energy to Tokens" where they presented a solid argument refuting Michael Burry's claims. There is a section in that article with the name "Depreciation Schedules and the Future of GPUs in Azure" which is worth a read. To quote part of the article: "Dr. Burry’s claim is predicated on an assumption that the NVIDIA product cycle is now 2-3 years, which is far lower than the useful life of the assets. We believe this is a fatal flaw in the argument. The new accounting, while beneficial to the companies in the short-term, is also predicated on real operational experience in datacenters. Back in 2020, when Microsoft, Meta, and Google increased the useful life from 3 to 4 years, we were still in the year 2 BC (Before ChatGPT). Now, in present-day 3 AD (After Da Launch of ChatGPT), the increases in useful life have proved beneficial to CAPEX-hungry hyperscalers. What began changing in IT equipment in 2020 that has continued through to 2025? The answer is reliability, and incentives."

Frequent_Fact_3625

Will the market crash…yes. Right now… absolutely not. Do you know how much money was spent on CAPEX, let’s those investments and data centers get built and fail first

StocksStormTrooper

BIG TECH insatiable CAPEX spending with little return is finally catching up

95Daphne

We are going to look back at ORCL from early September of this year and say WTF were we thinking, I'm afraid. Hate to say it, but I really think the Nasdaq (and growth tech especially) did it again this year and rolled on NON-macro fundamental reasons with this time being more obvious than Feb of this year (you can point at META/MSFT CAPEX+ META bonds here while February is vague).  This is not to say that other stuff couldn't have rolled on macro, but that occurred on the second bad jobs report.

95Daphne

It's not shutdown related because the META/MSFT CAPEX + META bonds deal jumped off the Nasdaq selloff. Tech hasn't really been trading off of rate movements for a while, this treasury bond move today isn't an issue today when it may have been in parts of 2021/all of 2022 previously. But fair warning, this same person here doesn't think the Nasdaq rolled on macro earlier this year.  The thing that might be similar to 2021 is what's happening to Cathie stocks, but if the Nasdaq gets hit hard next year, I don't think your main story will be inflation (AI+labor market instead).

ashe141

Sense* What do you mean valuations haven’t increased? NVDA was almost a 5T mkt cap. 80% of stock gains this year have been from MAG7. Companies printing cash don’t need to borrow to fund operations. Their CAPEX needs to show ROI and the consensus has been swinging against that for the last few months. Looks like it’s starting to break.

WickOfDeath

The asset depreciation for buyers of AI hardware is the biggest trick of all.... With exponential depreciation (1st year 10% 2nd year 20% 3rd year 40%...) you keep the asset's value on the balance sheet artificially high and the cash flow as well... with little depreciation you are doing only little "replacement savings" however an AI accellerator card depreciates 70% within two years because new models are most likely appearing and old cards getting replaced. For Nvidia this is good because they sell new stuff, for the hyperscalers this is bad because the CAPEX will overturn these low "replacement savings" within months.

DUELETHERNETbro

Apple too. That's where my money is going to be sitting. The market is punishing apple for not wasting CAPEX on AI shit when they should be rewarding them.

-mocho-

I don’t disagree, would just add that a lot (not all) of the AI investments are data centers/cloud (CAPEX) hardware that will be utilized and provide ROI even without AI, albeit it might take longer.

WickedSensitiveCrew

I went back through the thread content. There’s almost no comment that: - References actual T-Mobile metrics (ARPU, churn, debt, subscriber growth, FCF, spectrum spending, etc.) - Mentions telecom-sector trends (e.g., Verizon/AT&T pricing pressure, network CAPEX cycles) - Discusses macro-level effects (interest rates affecting debt-heavy utilities/telecoms) Basically, the thread lacks any analytical reasoning tied directly to T-Mobile’s business model or valuation. Was just generic advice you can copy and paste into any thread like "buy the rumor sell the news".

Ok_Currency_6390

Gonna take more than that to offset the incoming CAPEX losses 😬

Ok_Currency_6390

Don't worry it should only take about $3 trillion more in CAPEX and then AI should be profitable Yes, they are operating at a loss right now but they'll make it up in volume

Brawmethius

Honestly, I am loving the markets reaction to Meta, it just is such a great story and fuck you Zuck. First the market brutally punishes him before the AI hype for the "metaverse" which really is now just folded into the general AI Hype. Then he watches the market just absolutely fucking irrationally reward anyone promising CAPEX and R&D spend with no ROI in sight, for effectively adjacent metaverse. Like lmao fuck you Zuck. Now he comes out and says he's join the spend money party, and market is just like lmao fuck you again. Oh man. Won't lie. Love watching this. Fuck you Zuck.

Ok_Currency_6390

They're going to need a SHIT TON of ads to justify CAPEX haha 😂 What, every query answer ends in a plug? "That's a great question, by the way, have you tried Wendy's lately?" 😂😂

KittyLover-7

Think we squeeze one more year out of this ai stuff Markets given up with meta, how long till they give up with others CAPEX

gethereddout

The free cash flow argument falls short when you look at the CAPEX spend versus ROI. These stocks are priced for staggering growth

Fringelunaticman

Not really. NVDA is making billions, TSM is making billions, so is GOOG, MFST, AAPL, AMD, MU, etc. And they arent spending an obscene amount of CAPEX compared to their financials. People wonder if they'll be able to monetize it, though. And remember when META was going all in on VR. It has spent an approximate 73B on it. Has it hurt that company?

janon330

Burry's theory is that companies are changing how CAPEX gets amortized each year to hide the actual poor results.

_hiddenscout

$CDLR has been on a nice run the past few days. Company seems really cheap based off their fundamentals and interesting play on green energy. They build out special fleets for offshore wind. Just have a hard time pulling the trigger on something so CAPEX intensive. [https://finviz.com/quote.ashx?t=CDLR&p=d](https://finviz.com/quote.ashx?t=CDLR&p=d) Also came across another interesting name this morning, not sure if anyone follows them, $GTX? Looks pretty solid from a fundamental stand point: [https://finviz.com/quote.ashx?t=GTX&ty=c&ta=1&p=d](https://finviz.com/quote.ashx?t=GTX&ty=c&ta=1&p=d) Here's what they do: > > > > Growth seems a bit slow, but ROIC looks great: [https://quickfs.net/company/GTX:US](https://quickfs.net/company/GTX:US) Looks like they are buying back a lot of shares, they took out 10% last year and 1.5% QoQ.

_hiddenscout

$CDLR has been on a nice run the past few days. Company seems really cheap based off their fundamentals and interesting play on green energy. They build out special fleets for offshore wind. Just have a hard time pulling the trigger on something so CAPEX intensive. [https://finviz.com/quote.ashx?t=CDLR&p=d](https://finviz.com/quote.ashx?t=CDLR&p=d) Also came across another interesting name this morning, not sure if anyone follows them, $GTX? Looks pretty solid from a fundamental stand point: [https://finviz.com/quote.ashx?t=GTX&ty=c&ta=1&p=d](https://finviz.com/quote.ashx?t=GTX&ty=c&ta=1&p=d) Here's what they do: >Garrett Motion Inc., together with its subsidiaries, designs, manufactures, and sells turbocharging, air and fluid compression, and high-speed electric motor technologies for original equipment manufacturers and distributors in the United States, Europe, Asia, and internationally. >The company offers cutting-edge technology for the mobility and industrial space, including light vehicles, commercial vehicles, and industrial applications. >It also provides mechanical and electrical products for turbocharging and boosting internal combustion engines, as well as compressing air for fuel cell compressors, and compressing refrigerant for electric cooling compressors. >It offers its products in the aftermarket through distributors. Garrett Motion Inc. was incorporated in 2018 and is based in Rolle, Switzerland. Growth seems a bit slow, but ROIC looks great: [https://quickfs.net/company/GTX:US](https://quickfs.net/company/GTX:US) Looks like they are buying back a lot of shares, they took out 10% last year and 1.5% QoQ.

Ok_Currency_6390

Here's an idea: Fuck off with the ridiculous CAPEX, develop the technology, and then scale it up when it matures. But noooooo they've got to massively overspend, burn down everyone's retirement accounts, and then cover the blow up with tax payer dollars, all so they'd look extra cool when they pause and try to look thoughtful in an interview before saying some outlandish claim like feasibility doesn't matter Losers...

Ok_Currency_6390

Are you retarded? Have you seen the numbers these guys are putting out on CAPEX? Into technology that will tell you selling a poop sandwich is actually a unique, actionable business plan? This shit is going down in FLAMES, soon

AdMaterial7462

Common CRWV...dump. I need to see deeper red. Delay, customer unhappy. 2026 CAPEX 2X 2025....you have no money. Dump!!!!!

Adii2311

You know how much those ads make? You know where that CAPEX comes from?

WilsonKh

You’re gonna have to take another 2 steps back to find value (instead of hype). Eg Look at the suppliers for these power companies and identify why they are lagging. So far I’ve moved as far back as frieght companies that might benefit from all these CAPEX expansions. But it’s a double edged sword due to consumer demand uncertainty.