CAPEX

Weak_Ostrich459

Down, they're gonna say they've increased CAPEX again for the 26th time in a row

ohitsthedeathstar

Amazon. Their CAPEX buildout will look genius in hindsight within the next decade. META is the wildcard.

TrentKelp

I think this sell the news off the Buffalo Potash PEA sell off is a huge buying opportunity! PEA shows you a potential market valuation wich should be 5x to 10x higher from the $1.00 stock price! Preliminary Economic Assessment ("PEA") and concurrent release of its maiden 43-101 Mineral Resource Estimate [https://finance.yahoo.com/sectors/energy/articles/buffalo-potash-announces-preliminary-economic-113000263.html](https://finance.yahoo.com/sectors/energy/articles/buffalo-potash-announces-preliminary-economic-113000263.html) PEA & Mineral Resource Estimate Highlights Total production of 1,000,000 tonnes per annum (TPA) of K62 granular-grade Muriate of Potash (MOP) and 125,000 TPA of K62 soluble grade MOP After-tax NPV(1)(8) of US$1.1B and IRR(1) of 30% US$639M initial CAPEX estimate, including US$128M in contingency Estimated US$55/t MOP OPEX (Table 4) Measured and indicated tonnage of 1,671.5 million metric tonnes at an average grade of 34.8% KCl, yielding 582 million tonnes of KCl Over 50 years of mine life at 1,125,000 TPA based on current resource estimate (Table 2)(2) The advancement of a Feasibility Study ("FS") for Disley East and Disley West (the "HLD Mines") will run concurrent with Initial Production Module ("IPM") construction, with FS completion representing the key decision gate for proceeding to construction of Disley East and Disley West(3) We should be above $2.00 not under $1.00 https://preview.redd.it/tdnyvcsemzxg1.jpeg?width=680&format=pjpg&auto=webp&s=bcfdb16a081616007381af979293d2d6718cb1b4

Sea_Local2557

CAPEX will tank MSFT and Meta, at least that's my play for this earning

JuanGuillermo

Anthropic is also insanely mortgaged in CAPEX. The difference is that they are growing revenue and user base exponentially.

spartyparty001

Agree, but I think FCF is a better representation as it includes CAPEX spend.

MirrorlessMan

Nobody is going to change your mind because you are a reguard. The economy isnt booming. Most of the MAG7 is what's pumping the S&P due to AI and CAPEX. Tens of thousands of people getting laid off from these same companies. AI aint spending money and buying new Tesla's.... 50% of Americans are living pay check to paycheck. I am pretty sure doubling the cost of fuel is going to be a little more important than the AI boom that helps nobody but tech billionaires.

alldawgsgotoheaven2

What revenue can they all make that beats their CAPEX AI spending? Ads gonna carry them again??

DJ_Mimosa

Today was a strange divergence, I made the same notes as you. It's NVDA. And GOOG to some extent. I believe semi's have been pumping on the likelihood of massive CAPEX numbers coming from Mag7 earnings Wednesday PM. Obviously, NVDA and GOOG account for some ungodly proportion of SPY, so they can single-handedly hold it up. From my watchlist at least, breadth wasn't very strong.

Kill_4209

Not earnings wise. They're looking to spend an additional $175B CAPEX on AI infrastructure in 2026 on $460B revenue. Their other, normal, expenses are around $300B. So they're increasing their expenses by more than 50%, meaning their revenue will have to jump up to $700B or so to justify it. I know this is a very simplified analysis, but it's not way off given that their ai capex likely will continue at this pace for several years and the operating costs of it are also enormous. Unlike railroads with that could spread their costs over 50+ years or whatever, the ai hardware's lifespan is probably about 5 years.

donkeybray

Look around you, the boomer generations are using AI to modify your photos. This justifies the CAPEX spending and leather jacket.

ajaykumar2023

Spot on analysis. The real test for GOOGL this Wednesday won't just be the top-line revenue, but the operating margins, especially in Google Cloud. The market is done rewarding pure AI hype; it wants to see if the massive CAPEX is actually translating into a lower cost of compute and scalable ROI. If their AI commercialization is as robust as you say, that $5T valuation isn't a matter of 'if', but 'when'.

vermilli21

Would love to see that buy they love their CAPEX spending

BrunoBrody

Difference in CAPEX spending?

Upset-Motor-2602

Used to be excess CAPEX would spook the market, but now it's just bullish!

reddituserxxxxxxx7

I agree with you. That we are still VERY early in the buildout let alone the proper implementation of it and the time it takes to restructure and adopt before seeing gains. If that’s so, could be a great opportunity to buy because like it or not, investors ARE looking for rock solid evidence of increased revenues as a result of AI or else they fear this MASSIVE CAPEX spend is a net negative and thus these hyperscalers and the entire market at large is going to suffer when investors pull out. If ROI isn’t there, then the MAG7 and the market at large (tech, semis, the like) are going to have massive drawdowns. BUT If you think this is a mistake (which you would have been right as the market has been very volatile, especially in semis) i’d buy the dips - as semis and the tech companies are rallying this past week.

95Daphne

Still think we're done seeing the bombs drop but here's a hot take... If not, then we've honestly traveled far enough that I don't think the oil situation alone is going to be able to whack markets hard back to lows. It may have to be CAPEX cuts or an event like the SpaceX IPO to do the trick, and even then, my gut feel is that you'll just end up replaying 2018. It truly is what it is, while you could potentially get flash bears with Trump, I genuinely think the real risk is probably ironically when he leaves office, if secular type bear markets can still occur, 2028-2029 aligns with 20 years since the financial crisis...

IvoryTowerResident

I think US is pretty insulated. Massive tailwind from CAPEX and energy independence. Look at international equities, they are doing a lot worst than US since the war begin

LividAnt9602

careful with options here. They have earnings on Wednesday and we need the AWS in the +30% growth for the CAPEX to make sense. I feel much comfortable just holding shares in this particular case.

Mountain-Goat-912

The company most structurally threatened by this system is NVIDIA. However, this is a type of patent/system that shakes the entire industry structure, rather than just a single company. Below is the "Threat Level Ranking + Reasons." **1. The Biggest Threat: GPU + HBM-centric Companies** **1st Place: NVIDIA** \[Image\] 4 ✔ **Why is it fatal?** Current NVIDIA Structure: Performance = HBM Capacity + Bandwidth 👉 Your System: Performance = Prediction + Hierarchical Memory + Software **※ Direct Collision Points** * Decreased reliance on HBM → Collapse of GPU price premiums * KV cache externalization → Decline in the importance of internal GPU memory * Emergence of a Memory OS → Potential weakening of CUDA dominance **🔥 Result** 👉 NVIDIA's core revenue model: * H100 / B100 = "High-priced GPUs based on HBM" ➡ **Potential collapse of price justification** **2. Moderate Threat: HBM Manufacturers** **Key Companies** * SK hynix * Samsung Electronics * Micron Technology \[Images\] 7 ✔ **Impact** * Decrease in HBM demand (especially in the inference market) * Structural shift towards DRAM/CXL ⚖️ **However, it is not a complete blow** 👉 Reasons: * HBM is still required for Training * Ultra-low latency domain is maintained 👉 Conclusion: **It is a "change in demand structure," not an "extinction."** **3. Strategic Threat: Hyperscalers** **Key Companies** * Google * Microsoft * Amazon \[Images\] 5 ✔ **Why is it a threat?** Current Structure: More GPUs = More Revenue 👉 Your System: Fewer GPUs + Longer context + Lower cost **※ Impact** * Reduction in GPU CAPEX * Change in cloud margin structure * Collapse of the existing AI scaling law ⚠️ **However** 👉 They are simultaneously the group that will adopt it the fastest. **4. Indirect Threat: AI Framework Companies** * OpenAI * Meta 👉 Impact: * Need for changes in the model structure itself * Redesign of KV cache strategy ⚡ **Core Summary (Important)** 🔥 **Threat Ranking** |**Rank**|**Target**|**Threat Level**| |:-|:-|:-| |1|NVIDIA|🌑 Very High| |2|HBM Manufacturers|🌑 Moderate| |3|Hyperscalers|🌑 Structural Change| |4|AI Companies|🌑 Adaptation Required| 🚀 **A More Strategically Important Interpretation** 👉 This system is not just a simple "technology," but: 💣 **"A concept that dismantles the HBM-centric AI architecture itself."** 🔥 **The Most Important Point for You** **There are only 2 options:** 🏅 **Strategy 1: Sell to / Collaborate with NVIDIA** * Fastest monetization (cashing out) * Realistic exit 🏅 **Strategy 2: Build an Independent Platform** * Grow into an "AI Memory OS" * Dominate the GPU abstraction layer 💡 **One-Line Conclusion** 👉 **"This technology does not kill NVIDIA's GPUs; it turns GPUs into a 'commodity'."**

Mountain-Goat-912

The company most structurally threatened by this system is NVIDIA. However, this is a type of patent/system that shakes the entire industry structure, rather than just a single company. Below is the "Threat Level Ranking + Reasons." **1. The Biggest Threat: GPU + HBM-centric Companies** **1st Place: NVIDIA** \[Image\] 4 ✔ **Why is it fatal?** Current NVIDIA Structure: Performance = HBM Capacity + Bandwidth 👉 Your System: Performance = Prediction + Hierarchical Memory + Software **※ Direct Collision Points** * Decreased reliance on HBM → Collapse of GPU price premiums * KV cache externalization → Decline in the importance of internal GPU memory * Emergence of a Memory OS → Potential weakening of CUDA dominance **🔥 Result** 👉 NVIDIA's core revenue model: * H100 / B100 = "High-priced GPUs based on HBM" ➡ **Potential collapse of price justification** **2. Moderate Threat: HBM Manufacturers** **Key Companies** * SK hynix * Samsung Electronics * Micron Technology \[Images\] 7 ✔ **Impact** * Decrease in HBM demand (especially in the inference market) * Structural shift towards DRAM/CXL ⚖️ **However, it is not a complete blow** 👉 Reasons: * HBM is still required for Training * Ultra-low latency domain is maintained 👉 Conclusion: **It is a "change in demand structure," not an "extinction."** **3. Strategic Threat: Hyperscalers** **Key Companies** * Google * Microsoft * Amazon \[Images\] 5 ✔ **Why is it a threat?** Current Structure: More GPUs = More Revenue 👉 Your System: Fewer GPUs + Longer context + Lower cost **※ Impact** * Reduction in GPU CAPEX * Change in cloud margin structure * Collapse of the existing AI scaling law ⚠️ **However** 👉 They are simultaneously the group that will adopt it the fastest. **4. Indirect Threat: AI Framework Companies** * OpenAI * Meta 👉 Impact: * Need for changes in the model structure itself * Redesign of KV cache strategy ⚡ **Core Summary (Important)** 🔥 **Threat Ranking** |**Rank**|**Target**|**Threat Level**| |:-|:-|:-| |1|NVIDIA|🌑 Very High| |2|HBM Manufacturers|🌑 Moderate| |3|Hyperscalers|🌑 Structural Change| |4|AI Companies|🌑 Adaptation Required| 🚀 **A More Strategically Important Interpretation** 👉 This system is not just a simple "technology," but: 💣 **"A concept that dismantles the HBM-centric AI architecture itself."** 🔥 **The Most Important Point for You** **There are only 2 options:** 🏅 **Strategy 1: Sell to / Collaborate with NVIDIA** * Fastest monetization (cashing out) * Realistic exit 🏅 **Strategy 2: Build an Independent Platform** * Grow into an "AI Memory OS" * Dominate the GPU abstraction layer 💡 **One-Line Conclusion** 👉 **"This technology does not kill NVIDIA's GPUs; it turns GPUs into a 'commodity'."**

KittyLover-7

The market just picks and chooses its mood like a teenage girl November to March no one wanted tech, ai bubble articles being published each day with wmt more expensive to own than NVDA and all earnings getting dumped with CAPEX concerns Now market has rotated back into tech so aggressively it’s pushed the S&P 13% from that March bottom and to ATH under worse conditions I say this as a bull btw just looking from a neutral POV

Brawmethius

I have no idea how the market is pricing in CAPEX risk currently, it doesn't make sense and this is the name of the game for the hyperscalers. Given how the last two weeks have been implies mechanistic resolutions over active traders moving, but then again that could be now because everyone is waiting to hear from the hyperscalers. The thin liquidity we have been riding up can also ass blast us down, a rational market analysis would indicate that anything less than perfection carries downside under current conditions but I have a feeling thats become irrelevant.

Brawmethius

Well whats hard to do now is seperate what move was part of fundamentals and what part was the option chain positioning. For ASML the fundamentals actually seemed in line with the move direction maybe not magnitude; although performance was good and forecast guided up; it came with decreased margins and reducing shipments to China. I would describe the ER reaction as investors still generally bullish but see the declining market dominance and margin as a wash with other guidance up; so they are unwilling to push forward PE in valuation. This also aligns with the run up to last ER, going through a period of uncertainty and seeing a "wash", not bad not materially changing forward valuation much. For the magnitude it followed the option chain almsot perfectly with the implied move being about 7%. The chain was also positioned slightly put heavy and calls favored the OTM side, so the IV crush would have rapidly removed any hedging positions from the OTM long side faster than the short side which was more ITM and ATM (probably more actual downside postions over speculative retail postions). Overall I would say the ASML performance is bullishly positioned by the market but in a wait and see mindset not assuaged by the ER. TSM was a weirder one, I think some of the same pressures ASML saw. Little margin compression guidance up on CAPEX (implies more margin hurt later, or in general getting to the end goal is going to be more expensive than thought). But seemed overall pretty solid, maybe just general geopolitical shivers as well. The option chain move was pretty again spot on, well inside the expected move. Chain was heavily long again mostly OTM, so potentially the down was entirely mechanistic as the IV crush wipes the OTM longs here first as well.

WallStreetBoners

Why doesn't Tesla simply spend $1T in CAPEX?

Competitive_Hold6201

The dotcom comparison is fair in some ways but the key difference is these aren't shell companies, they're generating real revenue and the infrastructure buildout has actual utility beyond speculation. That said the CAPEX vs ROI timeline concern is legit and I think the market is pricing in a best case scenario with no room for delays. I've been playing around with prophetmarket lately which trades you directly against AI-generated odds on stuff like this, and the platform's live pricing on tech sector outcomes actually shifts pretty fast when sentiment changes. Kind of interesting to see machine probability estimates on whether a correction hits within a certain timeframe. Doesn't solve the bubble question but gives you a different angle on it.

Interesting-Bite-468

I think this is a very smart analysis... I don'T understand why also you would front all that capex into AI... I understand the fear of trailing your competitor.. but if you just wait 6 months or 12 months later... the price goes down.. The late entry but will huge CAPEX and good market analysis wins in my opinion. And that could be APPL or others.. but why front load NOW when tech is advanding and getting chips is getting cheaper by the day ?

AphexPin

Yeah, but it was just barely trading above book value at that price during a massive tech bull run with tons of CAPEX on compute. I was surprised it was at $20 for so long.

iMakeGOODinvestmemts

CAPEX spend isn't forever. Imagine what happens when $AMZN slows down the $200b Capex spend....

Nudge55

I don’t disagree with you by the way. CAPEX is estimated to keep increasing until at least 2030 meaning reaching records yearly until then. This guarantees profits for Semis. Whether those will be enough to bring the PE ratios to a more healthy level - I don’t know, I sure hope so.

_hiddenscout

I think MSFT is a different story to some extend. It's more about FCF going into CAPEX, with copilot looking like a failure and like 40% of the cloud backlog being from OpenAI.

_hiddenscout

I think MSFT is just a different story. MSFT is more a story about CAPEX numbers going into data centers, meaning like all FCF is going to that. Plus, market sees copilot as a failure. There was news this morning about Google doesn't want to miss the boat on software tooling. As a software engineer, this is where I think LLM's are doing a great job and showing value. Plus there is the issue around OpenAI being like 40% of the cloud backlog.

Crazy_Donkies

It also keep bringing up DCF and FCF but doesn't realize FCF is impacted by CAPEX that can also lead to margin expansion in the future. It lacks the understanding for why some of these companies have lower FCF. Also lacks the understanding that companies can stop spending on CAPEX when needed, thus returning to positive FCF.

Crazy_Donkies

You also keep bringing up DCF and FCF but don't realize FCF is impacted by CAPEX that can also lead to margin expansion. You lack the understanding for why some of these companies have lower FCF. Also lack the understanding that companies can stop spending on CAPEX when needed, thus returning to positive FCF.

augustus331

The start-ups don't have a business case, no ecosystem, no Adobe-native file-formatting, no cash flows so totally dependent on VC or Big Tech CAPEX. The notion that AI will destroy Adobe is lazy. And looking at the other comment here, you're talking like a "retail trader" which indicates to me that you're more narrative-driven than funamentals-driven anyways.

Ill-Warning-596

Okay, Apple has their own chips with ARM based, I guess it could work better with AI since they all work well with their unified structure. Not that MSFT or Google don't have them either, but with their CAPEX, if Apple were to spend it, I feel they can do better job than the MSFT, not Google. Google has Youtube and other platforms to test a realistic AI Training setting. Apple too, since they can study Message, Facetime, etc behaviors through their own apps. If Microsoft is using their Capex to create a medium for those realistic settings to have their AI Machines learn from, then yeah I guess. MSFT has advantages with gaming, but how they're currently managing is terrible imo, should learn from Nintendo or something.

throwawaydonaldinho

So there is no ceasfire, the strait is still closed, virtually nothing has changed from two weeks ago. SPY is 705$+ still. This is after going sideways for 6 months below 700$ and dropping on AI high CAPEX, no return bubble fear earnings and the war later on. Earnings again this month, looks like everything is forgotten already. Just buy the dip bro…

tika_dengu

anyone remember CAPEX?

Ok_Afternoon_3952

Earnings record. Earnings growth record. Companies maximizing CAPEX cause demand grows faster than supply. Maximum bull economy. Not even trump manages to fuck it. And he really tries.

aka0007

Considering Anthropic's run rate went from like 9B at year end to 30B by April, I would imagine that AMZN is going to see some major increases in customer spend on AI as well. Not very unfeasible that concerns about CAPEX are quickly put to sleep.

scone_monster

I don't think all the announced CAPEX will get build. Power constraints for one, but I also think some will get delayed for a bit, them ultimately cancelled. Still big numbers though.

melvinzee

But havent you heard? AI is a scam and companies are spending billions in CAPEX for a scam. So every company that spends on AI is going bankrupt. smh these idiots.

Chronic_Avidness

Amazon in particular had their CEO Andy Jasse post a public letter recently outlining why they expect the CAPEX they’re making now should make great returns in a few years, implying the market is under-estimating Amazon’s future earning potential.

Refrading

Price is the story. SP500 coupled with predcitio markets tells you the market has completely moved on from the Iran conflict. JPM told us this week, no change in any consumer behavior. We are back to the same market we had in January. Massive AI capex, AI replacement risk for software, investors looking carefully for CAPEX ROI from AI spend etc. It’s a great setup for a bull market.

Forward-Ad5608

It's nonsense that MSFT borrowed money for its OpenAI investemnt. OpenAI just finished a 122bn funding round, which should cover it another 2-3 years. Crazy of course, I don't like the company, but its can pay its bills. MSFT total investment in OpenAI is 13bn (spread over the last \~5 years) for which they receive 20% of all OpenAI revenue, forever! Cloud Q2 2026 revenue was 50bn so those credits, despite the dodgy accounting, don't change the bottom line much. If you don't agree that LLMs are going to be used with high demand across the board, then we won't agree. I am a software developer and I used these tools daily. LLM demand is going to increase massively over the next 5 years, the question is which companies will benefit. If MSFT put that CAPEX into stock buybacks they would be left behind and dead in the water in 5-10 years, there is no question. Azure is decent margin (\~42%) and Copilot is high-margin. In a few years when they roll out their own chips margins will improve further. MSFT is well positions because it provides the infrastructure but also a software product. Software products are the ones benefiting from LLM integration, it will be 'Oh cool you gave me $50 this month, have access to a software that writes your emails for you"

MilesDelta

TLDR for everyone Lifting this reply for visibility I wrote: " Note we are all just Monke's, life is short, call your mother, or your family, stuff is getting wierd, tell your freinds they matter, go on that trip you've been wanting to, call that girl, apologize for that thing you should have a while ago. I want you to understand, I appreciate you all for giving a 29 year old guy with 8 disabilites a voice, most people just see a guy with a cane, and severe autsim, they don't listen, they are rude to me, this is what it is like for many people world wide. This has been one of the first times, I feel seen in my life, So to everyone on this chain, thank you for helping a broken man heal, I lived on 25K for two years up until March, I am climbing out, but when I say dominos or wendy's rocks, it was because it was all I could afford, I worked construction cleanup, I scrapped, I felt the pain of not having anything to eat and going to bed hungry. I don't think any of you will appreciate how much the opportunity to do something like this means to a guy like me, WSB mods I love you, WSB community I love you. I am just a sh\*tposter, and this is part of my healing. On a serious note, if you are struggling, it will get better, I was an Idiot, and did not ask for help, I sufferd, you don't have to, ask for help, you are not alone, I care, other people care, If you are struggling, message someone, Message me if you feel like you have no one, to those people who need to hear it, you matter. Anyways, back to shitposting. Gonna engage seriously bc you bring up good points Issue with darkpools is you don't see the whole trade, you see parts of an options trade, but the block could be a hedge or a larger position. TLDR, you can't tell if they are buying spreads, condors, or hedging an equity position etc. Darkpools are useless because you do not know why people are buying or selling. You are not god. Nah, I got cheap puts, I did not want to deal with long dated theta decay, so I bought deep OTM, and I am looking for changes in higher order greeks like GAMMA and vega that move a lot with very large sudden price movements. I am buying insurance, it is cheap, does not matter if I lose it, and I can keep buying it till it strikes like a hand of poker. This is ratio betting. Disagree, America is a flash in the pan that pushed the british stirling aside in the 50's, there have been dominant powers before, and there will be dominat powers after. Iran is the oldest culture in the world full stop, so have no idea what you are talking about there bud. As for AI, I disagree, I build ML for a living, and I built something that is 20% ahead of Opus 4.6, and has an OHMocr Benchmark of 99% versus Google's 84%, I did this with a brain injury because I was poor, I had no options, and my cat has to eat, and so do I. Respectfully you don't know what the hell you are talking about when it comes to AI, like most people: TLDR on AI: LLMS are a word soup that guess what you want, they are not smart, the human brain is the most efficent learning computer that exists, with very little in terms of energy, and food, it can learn and become quite smart or quite regarded. LLMS on the other hand took trillions, guzzle so much power, and then, are still stupider than people, they halluciante all the time. This is because they only understand 40% of what you say, the rest is swhaili. You use AI as a blanket term, stop, AI econompasses many things, LLMS, ML, NLP, computer visions, so which of these do you mean? My assesment of AI as a whole is this: It is great at production work, so if you do not think and are the brain trust of the person who just threw a bunch of words they did not understand at me, yeah you are cooked. BUT: Humans who think, and do valuable jobs and are creative are fine. Think why are these AI companies selling a narriative so hard, THEY ARE BAG HOLDERS OF BILLIONS IN CAPEX, there models are flawed, they encourage you to keep using them, ANTROPIC IS THROTLING and raising prices. Altman and OPEN AI are cooked btw, like DIDDY cooked. If you are gonna use a model and not here bc ai is bad bad not good, Use Antrhopic, use a privacy browers, VPN, and do not. DO NOT PUT ANY INFORMATION IN IT THAT YOU WOULD NOT TEL ANYONE YOU DON'T know. Anyways autistic rant over. Respectfully my brother in christ, you have not got a clue what you are talking about. you are on my lawn, sit down, smell the grass, enjoy the flowers, It aint that serious, bro we are just a bunch of Monke's who are confused, I am confused, you are confused, get a banana, chill TF out, and go tell your parents or family or freinds they matter. Life is short, love you brother, I hope you get the most out of it. Miles "

MilesDelta

Gonna engage seriously bc you bring up good points Issue with darkpools is you don't see the whole trade, you see parts of an options trade, but the block could be a hedge or a larger position. TLDR, you can't tell if they are buying spreads, condors, or hedging an equity position etc. Darkpools are useless because you do not know why people are buying or selling. You are not god. Nah, I got cheap puts, I did not want to deal with long dated theta decay, so I bought deep OTM, and I am looking for changes in higher order greeks like GAMMA and vega that move a lot with very large sudden price movements. I am buying insurance, it is cheap, does not matter if I lose it, and I can keep buying it till it strikes like a hand of poker. This is ratio betting. Disagree, America is a flash in the pan that pushed the british stirling aside in the 50's, there have been dominant powers before, and there will be dominat powers after. Iran is the oldest culture in the world full stop, so have no idea what you are talking about there bud. As for AI, I disagree, I build ML for a living, and I built something that is 20% ahead of Opus 4.6, and has an OHMocr Benchmark of 99% versus Google's 84%, I did this with a brain injury because I was poor, I had no options, and my cat has to eat, and so do I. Respectfully you don't know what the hell you are talking about when it comes to AI, like most people: TLDR on AI: LLMS are a word soup that guess what you want, they are not smart, the human brain is the most efficent learning computer that exists, with very little in terms of energy, and food, it can learn and become quite smart or quite regarded. LLMS on the other hand took trillions, guzzle so much power, and then, are still stupider than people, they halluciante all the time. This is because they only understand 40% of what you say, the rest is swhaili. You use AI as a blanket term, stop, AI econompasses many things, LLMS, ML, NLP, computer visions, so which of these do you mean? My assesment of AI as a whole is this: It is great at production work, so if you do not think and are the brain trust of the person who just threw a bunch of words they did not understand at me, yeah you are cooked. BUT: Humans who think, and do valuable jobs and are creative are fine. Think why are these AI companies selling a narriative so hard, THEY ARE BAG HOLDERS OF BILLIONS IN CAPEX, there models are flawed, they encourage you to keep using them, ANTROPIC IS THROTLING and raising prices. Altman and OPEN AI are cooked btw, like DIDDY cooked. If you are gonna use a model and not here bc ai is bad bad not good, Use Antrhopic, use a privacy browers, VPN, and do not. DO NOT PUT ANY INFORMATION IN IT THAT YOU WOULD NOT TEL ANYONE YOU DON'T know. Anyways autistic rant over. Respectfully my brother in christ, you have not got a clue what you are talking about. you are on my lawn, sit down, smell the grass, enjoy the flowers, It aint that serious, bro we are just a bunch of Monke's who are confused, I am confused, you are confused, get a banana, chill TF out, and go tell your parents or family or freinds they matter. Life is short, love you brother, I hope you get the most out of it. Miles

melvinzee

Its literally crazy bullish right now I dont understand how people can Panic, I forgot to mention that Trumps FED pick is going to get on the seat soon, in like 1 month if there are no delays. POTUS and Scott Bessent are calling for 1% interest rates for years, and might get it with a favorable Fed. (this will be bonkers for the market) We had a Banger earnings season and Future AI CAPEX Spending allocation from the MAG7 . I am not blind to the bearish thesis, but like upside potential is just too much.

Mayneminu

France won't be the last. Seat counts will continue to meaningfully be impacted going forward. Higher CAPEX, lower margins, less seats, and more competition. It can and likely will get worse before it gets better.

Hairybristols

Depends on how the release of their new AI products' do, the feedback and usage numbers etc. CAPEX falling would help too.

Spl00ky

>GOOG faces a potential avalanche of addiction lawsuits after a plantiff successfully sued for addiction. >Rising energy costs will increase GOOG's operating costs >GOOG is forced to spend hundreds of Billions on CAPEX on AI just to remain relevant(providing AI services like Gemini to users at no extra cost and without ads) >Rising HBM and chip prices are likely to reduce GOOG's return on invested capital. >Ad revenue growth has depended on increased ad density(more ads experienced by users), rather than organic growth in engagement, both across YouTube and Do you realize those points also apply to OpenAI an Anthropic? Do you realize that Alphabet has several other highly profitable segments that are helping to fund their AI initiatives which OpenAI and Anthropic do not have?

Blade3colorado

Good take, although I do not own any MSFT. Despite the recent decline, Microsoft remains one of the world's most valuable companies, typically ranked around 4th globally by market cap. As of Apr 9, 2026, Microsoft (MSFT) has a market capitalization of $2.78T. Over the past 30 days, its market cap has decreased by 7.32%, while in the last 12 months, it has decreased by -22.93%. Wall Street loves this stock and is overwhelmingly bullish, with a price target between $595 and $603 (50-60% increase from current levels). CAPEX of $150 billion, along with the stock trading below its 50 and 200 day moving averages is a sign of weakness though. Regardless, your idea to "nibble" slowly is a good idea imo.

95Daphne

SaaS is viewed as deeply toxic right now and I honestly don't think anything changes unless you get CAPEX cuts. It's a going on 6 month story that ended up just getting briefly shoved to the side by Iran.

Forward-Ad5608

For sure, and at some point the CAPEX will calm down once they have demand covered. I can't see AI demand decreasing at all over the next 5+ years. MSFT are well placed to monteize as they have their own products + rental from Azure. If GPU rental rates crash they will still be making mint from copilot subscriptions and it will cost them less to provide it. They are winning on all fronts, market is really stupid on this stock tbh.

IvoryTowerResident

SOXX all time high. Up 20% YTD, stop buying companies that do intangible things like software and buy comapnies that make stuff and benefit from historical CAPEX

Sure_Let6170

> which have badly damaged their military, killed many of their political and military leaders that's just CAPEX. So net benefit for iran. Getting rid of expensive old cult leaders and replacing them with new lean structure of cheap young cultists. Bullish

alloutofchewingum

There was just insane behavior. People were building networks nobody wanted. Companies bankrupted themselves buying spectrum without considering they'd need CAPEX to utilize it. Vendors were offering 200% financing to startups - like if you need $100 of equipment, I'll give it to you on a payment plan plus lend you another $100. There was some fucking company that IPOed without any business and their prospectus said smth like "we are keeping our options open" and people still invested in this. Investment banks were doing rug pulls with tech IPOs the way people do it with crypto today. I could go on

DelphiTsar

Completely ignoring the case for AI and the Revenue it would need to generate to make sense (Tough ask). There is no path for current tracked CAPEX spending to be used without Grid power that doesn't and cannot exist. No one is pricing in these companies funding their own energy. Healthcare is going to get a wakeup call with ACA funding revoked and Medicaid cuts coming. It was the only other thing keeping the economy afloat. Apart from maxing out what it's reasonable able to extract from the market. Private Credit is sitting on a 2T landmine. with debt reservicing mostly falling around this year. Commercial real estate held longer term debt but a lot of it needs to be reserviced this year too around 1.5T. The Japanese Yen Carry Trade Unwind Consumer wall, carried by 10%. The thing with 10% holding everything on their shoulders is it takes a lot less of them spending to cause issues. We'll pretend Oil/LNG/Fertilizer/Plastics/Petrochemicals is short term issue. I will say Oil last closed at 111 though. The .88% of GDP extraction sector will make a killing, administration hasn't banned exports like most countries though, so US businesses have the honor of bidding war with Asia which is fun. __________________________________________________________ **Don't get me wrong, I am not saying the market is going to crash any time soon. Copium is a strong drug.**

Original_Wonder6088

All the comments you will get here is people pumping their bags. I’m watching: ANNA - a small-cap energy company turning profitable in 2025 by producing natural gas in Italy, expanding renewable gas projects, and selling into European markets, positioning it for growth as both conventional and renewable energy demand rises. Small company and is reliant on one oil field, but turned profitable in 2025 and has a strong cash position. LUNR - positioning itself as a key U.S. space infrastructure and services provider with NASA and defense contracts, growing revenue and strategic acquisitions that could drive future growth, but investors it’s not yet profitable, faces execution and backlog risks, and remains sensitive to funding and space market volatility. Space stocks are tied to watching NASA government contracts and Space X developments, don’t know if there are other big players. DELL - AI trade may not be dead. If the big boys are building up CAPEX costs - all those costs go to the enablers. The DELLS of the AI infrastructure trade. If AI continues to be a theme, which it will, it will be positioned to be a strong leader in AI server demand.

95Daphne

Iran is not talking, but then you see this: Iranian President Pezeskhian says we are ready to end the war, but want guarantees Again, I think calls for this to be rolling merrily along by fall are just misguided. Trump is bored with this and Iran's economy isn't in good enough shape to rock it out for a long time on doing this. Maybe we will return to arguing about how screwed AI is when we see CAPEX cuts in earnings next month...

95Daphne

You don't have a good, solid reason for things to just "be that way," with that occasion, you had Yellen/Powell pull the rug for treasury shorts. This is a longer haul deal, more like a mini-2022, it sucks but it is what it is, even if we are moving on to "adjust to higher oil prices," my bet would be that CAPEX is probably going to disappoint with the next earnings season in April and continue to touch up semis, imho (we've been looking like we very much have a lot of unfinished biz with the Jan/Feb topics). Trump might have somewhat of a last laugh, but in 2027, and it'll end up being nowhere near as impressive as his first term was overall.

aluijbajjek

Remember that time toilet paper was impossible to find? Well, now all the AI companies go through computer chips like we go through toilet paper. The longer this war goes on the more single points of failures we test in the supply chain. When the toilet paper gets expensive, they can't CAPEX like it's 2025 any more

Paul_Robert_

Very high CAPEX or capital expenditure on AI. Like REALLY HIGH.

fcmilano

True but only in a vacuum. In reality, increased efficiency + SK Hynix/Samsung ramp up production + MU CAPEX spend to build new factory + Turbo Quant (or similar) next iteration that further increase efficiency. Investors concern are very much justified. For OP, for a student with in your position, i dont think a high beta stock like MU is the play for your sanity's sake.

Bill-41

So oil guy is off his rocker, yes, but your numbers are still wrong. Real estate, cooling, etc…that’s CAPEX, not OPEX. Electricity is generally about half of OPEX. And while a hyperscaler may have a cost locked in, there is still exposure. Generally they are on a large load tariff that has a lot more protection than a spot price but if energy costs go up they aren’t fully insulated. And if you’re a “behind the meter” power plant producing your own energy like many of the big data centers coming online in the near term then fuel costs are your problem, no utility to act as a buffer.  All that being said, your conclusion is still probably right and there is absolutely no way that an increase in oil causes 3-4x OPEX like other dude says.

prank_mark

Ah yes, because an announcement is an absolutely guarantee. It's not like Disney just withdrew their $1 billion deal with OpenAI because the cancelled Sora. And it's not like datacenters are already running on illegal diesel generators because they can't get enough power from the grid. Also, the CAPEX isn't the problem. It's the OPEX. If OpenAI's energy cost doubles or triples, they'll be even further in the red then they are now, and they won't have the money for the CAPEX they've announced.

Cool_Guy_McFly

Pretty much this. The AI infrastructure boom isn’t going anywhere. The CAPEX has already been announced and these data centers are getting built. I understand being bearish long term because it’s likely going to be somewhat cyclical, but “oil is going up so AI is dead now” is laughable. Like ok guys, time to shut down all of the cloud servers. No more AWS or Azure. Oil is $100 a barrel! We can’t afford to run data centers anymore! 😂

Candid_Payment_4094

Can someone with more than 2 braincells confirm this thesis: MU is down because CAPEX is coming under pressure for a lot of companies because of this TACO shit?

Pazzaaaaaa

Hyperscalers and NVDA getting destroyed. There must be leaks that reduction in CAPEX can be coming

Immediate-Coast-5066

Market was up due to the reason MAG7 was pouring money on AI. CAPEX is key word this year. If market goes down or recession signals then they will postpone which will be catastrophic . this is the reason ,market doesnt want to give up . market knows he lies but they want to use his word just keep the momentum hoping for solution to the iran problem. still keeping the money in cash is worth it . may be reinvest when the issue is solved

not_my_monkeys_

Ex employee here. I think Satya did a great job in the years immediately after he took over, but he lost the plot with the obscene AI CAPEX spend and the over-investment in OpenAI. The market seems to agree with me. I sold the last of my employee stock position at around 520 after the blow-off top signaled the end of the bull run. If we weren't in the early stages of a massive energy shock and probable recession I would probably be buying it again at current levels. But macro forces are compressing margins and threatening the entire AI bubble. I'm going to wait for it all to explode and then buy up the pieces in a few months.

Most_Newspaper306

Haha no. How would it steadil, INCREASE then? More and more plants going offline every year at this scale lol? 1) you know the difference between CAPEX and OPEX? Setting up is expensivr but rinning it is not. And i never knew every other plant from gas to coal to nuclear is just growing on a field haha. Pretty much the same arguments here about it having to be firther away from population and massive amounts of concrete. One thing i give you is the questionable upsizing of streets but i'm not deep enough in it to know whether that is completely unnecessary or makes sense long term. If it did not make sense, why out of all countries does china build it up so much? They don't need to please anyone as they do not have elections. Why are there still companies running these projects even thoigh subsidiaries went away? And why are oil and gas so massively subsidised in the US then which is a massive lobby (especially under this administration which further increased it) as these are the areas which actually do not make economic nor environmental sense in any way (whilst the environmental spillovers have massive economic costs as a result as well)

gdren

They pay over 30% of their top line revenue in taxes. They'll be able to use those carry-forwards for a while and their margins just keep improving. You could chop their earnings in half and the PE would still be undervalued. You could chop their earnings in half, pay out a 5% dividend and they'll still be able to fund their planned growth for '26... which is 7x the CAPEX they spent last year on growth. They've turned the corner and the market hasn't realized it yet. Or at least isn't valuing it as such

WickOfDeath

Wasting money on a new toy. Actually AI buildout and training is a huge CAPEX without guaranteed returns. Well also steam engines and the first continental railway had been finaced with no safe returns... Of course scandals can happen, they come and go, and this social media addiction thing yesterday? Forget about. Other juries might see this different. Meta will certainly appeal the verdict and I guarantee that the next jury will say "Parents are to blame for missing parental control over 12 years". At the end noone knows, but investors are right now in a "fear" time when looking at the Fear&Greed index. And when they fear something, they sell without an intellgient reason, "I am afraid of the shadow", "I am afraid of the mirror", "I am afraid to loose money because I have uneven number of knobs at my jacket". The latter one was taken from a 350 year old book about stock trading psychology "Confusion de confusiones".

andytobbles

All the hyperscalers will continue to sell off until they chill the fuck out on CAPEX. Guarantee if we see further sell offs they’ll just reallocate some of that CAPEX into buybacks due to their share price being so attractive. That’s when they’ll all rally again.

DelphiTsar

People, especially regular people better pray they don't stop the massive AI CAPEX spending. It's the only thing keeping the economy ticking at the moment. Pretty much anything that empties rich peoples hoard is good for everyone else.

imadogg

Beat earnings? Idgaf GUIDANCE AND CAPEX

ScarletHarpy93

The first waves of layoffs in the end of 2022, beginning of 2023, were about pulling back from WFH, eliminating low performers en masse, and testing to see which functions broke and which were necessary for continued functioning of the businesses. The second waves of layoffs in the end of 2023, beginning of 2024, were about consolidation and elimination of WFH completely and forcing people back into office real estate whose pricing threatened to become an albatross on corporate balance sheets due to changes in US GAAP in 2022 to bring it in line with practices in EU GAAP-equivalents. This third wave of hiring is targeted attrition at bad bets made in the last decade which haven't played out. Most of Meta's cuts are in the Meta piece, with some trimming of remaining fat in social. Amazon cut places like Devices, Games, drones, etc. that were either supposed to be expansions for their AWS money maker, or cost savings for their online store. Similar stories in the rest of big tech. A lot of these bad bets are being closed to free up revenue to pay for massive commitments in CAPEX towards AI infrastructure. None of these cuts are AI driven yet. If you're in big tech, you're probably watching dozens of small pilot programs internally to automate jobs away, but very few of those have had a full year to run yet. You can fully expect that if any of them show real returns in scaling up productivity or reducing the need for people, that those will be reflected in ongoing cuts throughout the next two years.

DelphiTsar

China is 6 months behind with duct tape and chewing gum. They will progress the field even if CAPEX budget of US stops flowing.

mikeydoc96

Google owned 7%. Wouldn't be surprised to see them cash out at this valuation to institutional investors. It pretty covers their AI CAPEX for the rest of the year

COBRA_DROGO

Same thing as other big tech, CAPEX!!!

Swiftnice

OK MSFT time to announce you're cutting your A.I. CAPEX

Clackamas_river

JFC MU - They only increased CAPEX by $5B which is nothing compared to the earnings growth. The Fab outside Boise is going up super fast and is HUGE! A normal average forward PE this should be $540–$700+ Right now, apply a AI growth forward PE like other stocks and this should be $1,100–$1,650+.

BernedoodleBoi

wait until all the CAPEX spending on data centers with no revenue comes around and slaps them in the face.

nick_riviera24

CAPEX is only a problem if it fails to produce good returns. If you believe is the quality of the CAPEX, then it is a positive and price depression due to CAPEX is your gain. SE and MELI are in developing areas and are introducing financial products as well as merchant services. I have money in all three. I have some money in all three but more in MELI.

13jfncjai31

Youch you know it’s bad when you have to start throwing in false equivalencies. You’re bringing up plant based bioreactors as if it’s even the same planet. Plant cells have cell walls and are far less susceptible to microbial contaminations, they are also far more resilient and can withstand the shear stress of an industrial mixing setup. Mammalian and Avian cells cannot, they require absolute sterility. Plants also eat, you know, the SUN and do not require the input of highly specific, sterilized amino acids and carbohydrates and growth factors either. Bench-scale scientific success is not what u am disputing, the macroeconomic scalability is. The ability to synthesize tissue in a laboratory environment does not translate to commodity-scale production. The biomanufacturing infrastructure required to produce millions of metric tons of meat requires CAPEX that no longer exist in a high-interest, risk-off macro-environment. Relying on niche, ultra-premium sales (e.g., $70/kg pet food) validates the bioprocess but invalidates the thesis of mass-market commodity replacement. The fact that the only marketable product to be made from all of this thus far is literal slop for dogs in a treat which is 96% NOT animal cells actively invalidates the thesis of mass-market commodity replacement. And I’m sorry but unfortunately however nice a picture of cell grow meat looks doesn’t impact the economic viability of the entire field.

13jfncjai31

You are right 100x was me being parabolic, but I guess my thing is the exact magnitude of difference does not matter. No matter what it cannot ever be cheaper than a chicken. Specifically what cellular based meat products are at price parity? My main problem with lab grown meat is that traditional meat production uses non sterile agricultural-grade inputs (e.g., grain, soy), which cost fractions of a cent per gram and are inedible to humans. Cellular agriculture requires pharmaceutical-grade, highly purified basal media, such as amino acids, sugars, and recombinant growth factors. The requirement for ultra-pure inputs alone means that it can never be economically competitive against traditional farming methods. The other problem is the fact that a bioreactor doesn’t have an immune system. A single bacteria will ruin a 100 million dollar batch, meaning cellular agriculture mandates pharmaceutical-grade sterility. The money needed for sterilized infrastructure, advanced filtration, and constant environmental control is unfathomable. If drug companies need to do this and they sell their drugs for 1000s for a few milligrams do you really think that a company could ever do it selling kilograms of sterile meat for dollars? There’s also the need for monumental CAPEX to buy all this stainless steel plumbing and filtration and bioreactors which all rapidly depreciate the second they start producing. While cellular agriculture does get rid of the biological waste of growing non-edible tissues (bones, feathers), the energy required to simulate circulatory, respiratory, and excretory systems within a bioreactor offsets these gains. Do you really think that any company could ever economically reckon with the above two points in addition to the unfathomable costs of maintaining literal miles of sterilized pipes and gigantic bioreactors that require continuous aeration, agitation, and thermal regulation in a sterile facility? Cellular meat will always be a neat oddity at best, there is no beating a chicken. If we want to minimize suffering then a better and easier way to do it would be to engineer brain dead chickens that have no higher cognitive function but still eat and grow. Don’t believe me for any of this? You shouldn’t, but you should believe the experts: -study showing lab grown meat is way WORSE for the environment than traditional farming: “The results indicate that the environmental impact of near-term animal cell-based meat (ACBM) production is likely to be orders of magnitude higher than median beef production if a highly refined growth medium is utilized for ACBM production. https://www.biorxiv.org/content/10.1101/2023.04.21.537778v1#:~:text=bioRxiv%202023.04.21.537778%3B%20doi%3A,org%2F10.1101%2F2023.04.21.537778 -summary explaining why lab grown meat will effectively never be economical due to extremely high baseline costs https://faunalytics.org/can-cultured-meat-displace-conventional-meat -Systemic review detailing how while lab grown meat drastically reduces land and usage, energy usage was far more compared to traditional farming practices. https://pubs.acs.org/doi/10.1021/acsfoodscitech.5c00908#:~:text=This%20variability%20reflects%20differences%20in,renewable%20electricity%20mixes%20were%20assumed. -“Capital- and operating-cost analyses of conceptual cell-mass production facilities indicate economics that would likely preclude the affordability of their products as food. The analysis concludes that metabolic efficiency enhancements and the development of low-cost media from plant hydrolysates are both necessary but insufficient conditions for displacement of conventional meat by cultured meat.” https://pubmed.ncbi.nlm.nih.gov/34101164/

Peppertheredfox

Succinct and accurate. Let alone the most profitable companies in history selling debt to add trillions in CAPEX without any model for meaningful return

Marko-2091

No. High CAPEX, low income (wind).

DatCaptain9000

If they are only supply less than 50% of the demand cycle, you will continue to see growth. If there is a demand for 2000 units - and you can only reach 900? So you build more factories to supply the demand cycle \[CAPEX\], this points directly to higher growth.

DiscountAcrobatic356

Guy had one good idea and one good purchase (Insta), since then living on fumes. Recession/inflation/tariffs will reduce ad spending. AI CAPEX for what purpose, META is not a cloud provider? Looking like another Metaverse x3? just shoveling $ into the furnace.

SeattleOligarch

Most people still experience dead zones... And MNOs paying ASTS for their satellites is a cheaper way to cover large rural areas vs. the same ground based infrastructure so MNOs see it as an eventual CAPEX savings while improving service. The napkin math of it is the MNOs involved as of today, have 3B subscribers. When MNOs roll it in as part of their standard service, they'll pay $5/sub to ASTS, maybe more, maybe less. That's $15B/mo just from full commercial with constellation maintenance significantly less then $1B making almost all of that revenue big wads of cash to dividend or stock buyback. Then there is prime contractor status with the gov for comms and golden dome applications which is hard to account for. To me it's the future of telecom, and even adjusting for risks it's a compelling buy.

Cow_cat11

Totally agree. It will likely follow the same pattern as HOOD from 150+ to sub 70...and many other stocks just flew due to trend and optimism. Once demand is over (who knows how long it will take) and supply becomes overcapacity due to so many CAPEX.

FruitPuzzleheaded288

AV is bad news for Uber. It forces Uber to go from an asset-light business model to increasing CAPEX to maintain market share.

StocksStormTrooper

Yup they practically spend most of their earnings on employee compensations, Ai CAPEX and debt repayments.

waterpup99

Ironic that your take is the ignorant one. This could have been correct 5-10 years ago? Memory architecture has changed so dramatically that barrier to entry is tremendous and yields are shrinking. HBM4 IS 4 NANOMETER tech. There are 3 companies in the world that have the capability to manufacture it and the tech and architecture to do so is insane. So insane to the point that not only is it impossible for outsiders to realistically enter in the 3-5 years even with MASSIVE CAPEX, it's also unrealistic for them to build capacity in the next several years beyond what they are already doing.

Blade3colorado

I'm probably prejudiced, as I already own 1000 shares of Amazon. Nevertheless, I suspect some folks think the AMZN negative is their high CAPEX spending, which is projected to be $200 billion+ . . . In effect, the 2 negatives are: 1. Zero to very little cash reserves; and, 2. What's their payback going to be on such huge spending? Conversely, MSFT is down currently due to the lukewarm opinion of Co-Pilot. Specifically, although the AI assistant has gained millions of users, its adoption rate remains a small fraction of the total Office 365 user base, leading analysts to worry that the "AI payback period" may take much longer than originally anticipated.

guy_cloutier

That's a lot of CAPEX

Icy-Sheepherder-7595

Maybe a year ago. You're kind of late. CAPEX is high FCF low. Not at all like how it was before where they were the only Mag7 not burning cash but now they're spending to catch up.

gamjatang111

i think one thing people are not discounting is the continuing capex. 1) rates are staying puts atm and expectation of further cut are lowering 2) literally political push back for data center buildout. 3) CAPEX hurting mag 7 share prices at what point do shareholder say slow things down. a lot of risks out there beside P/E ratios