CAPEX

Beautiful_Lettuce603

They will eventually have a lot of cash in hand, to either buyback shares or buy companies as I don't think they have major CAPEX investments opportunities right now. Maybe they'll try to buy competition

Beautiful_Lettuce603

Yeah basically they can always take advantage of good valuations to buyback shares or acquire companies. I mean they have huge margins as any software company, so they'll have to either buyback or buy companies, I don't see many high CAPEX projects for them

RecommendationFit996

There is likely way more money to be made before we get to the point of euphoria. So, everyone will keep pumping until it bursts. In 2000 there was so much euphoria that IPOs for companies with no earnings or track record were coming to market and being bid to the moon. There is no telling when the music will stop, but as the astronomical amount of CAPEX for AI continues to keep the bull charging, there is no reason to bail now Besides, Wendy’s is understaffed and needs a bunch of degenerates to push too far in order to fill open positions

MasterDebator691269

If everyone knows we’re in a bubble, you’d need a catalyst to pop it. That will be Alphabet, Meta, Amazon, Oracle, or Microsoft saying (a) they’re slowing down AI CAPEX or (b) they’re not seeing the returns they previously forecasted. In those two events, hundreds of billions will be wiped out easily. Could be this year, next year or the year after next

jensenskawk

What happens when GOOG says they are slowing down AI CAPEX spending?

penny2770

Everyone knows it’s a bubble including CEOs? Have you listened to a single earnings this quarter? Consumer spending strong. Median earnings strong. No forecasted slowing on CAPEX for at a least the next 12 months from the hyperscalers. I know bubble talk is hot in the streets right now but this is just regarded level assumptions.

TopTheory1170

All these crazy investments will never see enough profit to cover near the amount being put in. CAPEX that’s a large chunk of these companies entire market value is not a good sign. META alone claims they’ll be investing $600B in AI while they sit a $1.85T market cap, putting a third of the company on the line for chat bots, can’t forget how they recently laid off a ton of staff in their AI department😂

Grizzly_Guy218

But everybody has an iPhone in the USA, and switching costs are high due to the Apple Ecosystem they have built. Apple isn’t going anywhere anytime soon. They have always taken the approach of letting tech develop before heavily investing in it. Once we know the best use-cases for AI, Apple will optimize their suite of products to use it correctly. Investing in companies just because they have high CAPEX isn’t necessarily the best strategy. Some companies (i.e. Meta) could be getting reckless with their investments. Apple is taking a more calculated approach, which I would argue is more investor-friendly. Smartphones aside, Apple is industry-leading in silicone, laptop computers, tablet computers, in-ear buds, etc. I foresee a change in CEO (similar to MSFT moving on from Ballmer) in the next 5-10 years for Apple. I imagine they will bring in a new visionary CEO (like Nadella at MSFT) who will move Apple forward and keep them relevant to modern technology trends. It’s such a rapidly changing time right now, I think AAPL is positioning themselves really well.

whodey84

Just feel it in my plums that MAG7 is tapped out on "good news", CAPEX, AI pumps etc. But also people are too afraid to sell due to the perma-buy-the-dip. So i just see a grind sideways and eventually down (Q4/Q1) for MAG7 as the real economy gets worse. but wtf do i know. just feels

Equal_Pitch_8935

imagine a company cutting CAPEX to hand profits over to a CEO who invests it in totally DIFFERENT companies which you as a shareholder of the first company do not get any shares in whatsoever

Exclat

My guess has always been that the next correction will be 1 of these 2 scenarios, 1) AI initiatives don't yield productivity increases and reductions in OPEX/headcount enough to justify the CAPEX spending. AI initiatives can't be implemented on revenue generating activities. 2) AI initiatives successfully yield productivity increases and companies lower OPEX via mass retrenchment. Social unrest breaks out due to AI driven unemployment and wealth disparity. Government hasn't implemented measures to ensure economic benefits of AI productivity are spread across society. TBH AI only needs to deliver on ensuring companies can operate on minimal headcount for it to be a success.

Comfortable-Pay-4801

Massive identified fields, with potential for more. Recent JV farm in with Timor GAP has taken a ton of risk out on geopolitics and CAPEX fronts which were major hurdles. Pretty much green light to go ahead and start pumping offshore, still some work but looking bright

whatsgoingonhonestly

80% of the stock markets gains this year are in AI. AI that is completely gaped without the very important minerals China is cutting off from us. Our entire GDP growth for the year has been in ludicrous CAPEX investments in AI data centers that we lack the infrastructure to support without very important global trade we seem insistent on destroying.

habfranco

Oh you mean the CAPEX of the ones being the profits of the others, and vice versa?

Loud-Ad9148

Why the fuck is everybody ignoring the consistent YOY tech profits being announced? along with massive CAPEX budgets?

95Daphne

If the Nasdaq doesn’t close positively today, that would continue the stretch where it can’t string together back to back positive days for the past couple weeks. Definitely slowing, but probably meaningless for now unless the potential for flat CAPEX announcements during earnings spooks people.

ratbearpig

Just to add to this, Lynas' Appendix 4E in August 2025 had this to say about heavy rare earths: *"Significantly for Lynas and our customers,* ***first production*** *of separated Dysprosium and Terbium was achieved at Lynas Malaysia in May and June 2025 respectively. Lynas is now the world’s* ***only commercial producer*** *of separated Heavy Rare Earth products* ***outside China,*** *able to supply the two Heavy Rare Earth products required for rare earth permanent magnets used in electric motors."* \- So it sounds like they have very recently (literally 4 months ago) been able to develope the ability to separate the HRE. No mention of ability to refine it to high purity though. Also, interesting: "Lynas has a contract with the US Department of Defence for the construction of a Heavy Rare Earths processing facility at Seadrift, Texas. The contract is an expenditure-based contract under which all of Lynas’ properly allocable construction costs in respect of the facility will be reimbursed. A contribution by the U.S. Department of Defence of approximately US$258m is currently allocated to the Seadrift facility. Additional CAPEX will be required. There is significant uncertainty as to whether the construction of the Heavy Rare Earth processing facility at Seadrift, Texas will proceed and, if so, in what form. Lynas is working with the US Department of Defence to negotiate a mutually acceptable offtake agreement for production from Lynas’ operating assets." Finally, there was this bit: *"Lynas’ product range includes Light Rare Earths – Neodymium and Praseodymium (NdPr); Lanthanum (La); and Cerium (Ce) – and Heavy Rare Earths – Dysprosium (Dy); Terbium (Tb);* ***unseparated Samarium****/Europium/ Gadolinium; Holmium concentrate; and unseparated SEGH."* \- I believe refined Samarium is what is used in the production of missles, which would still require shipment to China to separate/refine.

95Daphne

Regardless of where we finish today, this is extremely annoying price action overall. Yesterday was good overall even including the cooking oil incident, but today is destined to be bad. May not matter much for now, I'm not sure it will unless CAPEX during earnings spooks the semi sector.

LosHuevos69

With IREN pumping, does anyone think there are some sympathy plays happening? CIFR, HIVE, BITF? Realistically, what differentiates them between IREN other than IREN actually has made money? CAPEX concerns for the other tickers?

doorcharge

Like any corporation, hold 20-30% revenue in operating account, 10-15% for CAPEX or strategic investment, and the rest in money market accounts to bear interest from short term debt securities while remaining relatively liquid in case you need it. Maybe hire a corporate treasurer while you’re at it.

Sad_Sorbet_9078

Appreciate your write up and think I will take a small bite. Some warning from someone who is down big time on Wolfspeed, a company with some similarities. **1.** **Don't Trust The Federal Government To Honor Their Agreements**. This is company deserving of support to contribute to our global competitiveness in the new world order. Unfortunately, the new administration's cabinet picks are financially motivated to ignore coherent strategy in countering China's better positioning. **2. If a Predatory Lender Gets Involved: RUN!** Wolfspeed was wiped out by their senior creditor, Israeli aligned Apollo Global Management who funded Epstein, potentially enabling blackmail material on our country's top decision maker. Knowing about a lender's history and tactics can set you up to recognize danger before they take your ass to the cleaner. Pay attention to who loans Novonix money. Current shareholders could easily be sacrificed to payoff the CAPEX infrastructure of future owners. **3. Be Mindful Of Short Interest:** The system is set up to transfer wealth from poor to rich. Our short selling system is vulnerable to global adversaries, predatory lenders or competitors destroying small companies like Novonix. Do not trust the SEC to do their job. I wish someone had told me about this stuff before I made poor decisions with Wolfspeed. I still believe in them just like I believe in Novonix. I hate to stifle investment in important companies like this but its important to be aware of current leadership and predatory sharks in the financial system.

Brawmethius

There are three possible outcomes for the AI Boom: 1. OpenAI as the lynch pin of funding, comes around and says "sowwy I have no money to build these things". CAPEX phase collapses. Given how investors are literally rabid to give AI money away this seems unlikely. 2. Investors move past the CAPEX phase and look at end-user-revenue. Worst case, and current trajectory, there is none. At least not in relation to the amount of CAPEX. People realize they've made a killing selling shovels to gold miners who aren't finding any, but the demand for shovels about to collapse. This seems like the current trajectory. 3. Investors move past the CAPEX and look at end-user-revenue; and guess what its fucking there. Altman has replaced you, you filthy poor, and investors validated for their CAPEX spend and naysayers spend the next 30 years going "its going to collapse anyday now" while we enter the next information revolution (last being internet). EITHER WAY WITH THE EXCEPTION OF "1" NONE OF THIS SHIT CAN HAPPEN IN THE CAPEX PHASE. FUCKING ACT LIKE YOU BELONG HERE.

Tkins

You are completely misunderstanding how the investment costs versus revenue generation is occuring with AI. The investment you see today are not tied to the current revenue. The current revenue numbers are from the models that are already released. The costs associated with that revenue is from a year to two years ago when training occured. To act like the current CAPEX of these companies should be generating revenue immediately is out of reality. If you're building a plane, you don't say, wow we've invested 10 million dollars in this plane and it's produced no revenue, when you haven't even put the wings on it yet. AI is not in Operations phase, it's in the R&D and expansion phase. It is completely normal for the costs to be higher than the revenue. If you compare the reveneu today with the costs form last year, then you see that AI models are absolutely positive ROI.

95Daphne

Probably best shot at getting it is beginning in early 2026 unless the market pitches a fit on CAPEX guidance later this month/early Nov. As ugly as this day has been for some things ex-tech, the games probably don't begin until you switch the Dow lagging for the Nasdaq lagging.

0o0o0o0o0o0z

> Enron did this for a while selling product, services, and renting real estate to their 100% owned subsidiaries. I forget how it turned out for them.... I mean, let me know if I am wrong, but a lot of this circular shit is because a lot of these companies are doing CAPEX spending. I mean, it makes sense to try and lock yourself into these types of things, so these companies design their infrastructure and business around your chips, dev kits, hardware, etc... So I dont think it's apples to apples... please let me know if I am wrong. As weird as this sounds, I think you're going to see supply lines and new ATHs in the market. There is so MUCH liquidity it has to go somewhere, and a safe bet is QE is coming down the pike + deregulation and the corporate tax breaks that go into place in 2026, so I dont see equities really eating it for another 3-4 quarters.

Primary_Olive_5444

2 variants Intel 3 GPU tile 4xe sku Higher end TSMC node It's good news for intel.. why?? Intel 3 was only used on Xeon 6 and Arrow Lake U series. So the equipment and CAPEX spend on intel 3 node is been further monetize now with GPU tiles on Panther Lake. The question is can or will it sell or perform well when launched? Then it becomes even simpler, just connect with whoever gets hold of the Panther Lake dev kit device and run the test. Then use that knowledge to trade options. U can make X times either good or bad results. Because having the dev kit would allow u to measure the performance and trade ahead of other option degens Com'on do whatever it takes to get a dev kit now.

Defiant_Departure270

I knew it….you are super intelligent and the extension cord post was more…now I am being taught things I had no clue about. Seriously I appreciate this feedback. You’ve also looked deeper…very deep ….so deep you found crazy bat shit…lol…yep the data ain’t mathing….the science of facts….all plugged in presents more issues which deteriorate net profits Just so readers know….one of our main very very long holdings is SMH…$800,000 long term initial placement. That sector is where high net profits exist even with future CAPEX spending…..even in its huge industry capex lies immediate ROI and share prices above appreciation at about 26.51% since inception. Base hitter for the next 50-100 year family dynasty trust material. Next…UNH UPS VB IWV Later gators time to sleep…powering down

LarryStink

The milestones only mean anything IF it means 1. Increased GDP through productivity gains. Or  2. Increased CAPEX spending  In which case party on wayne.

Hot-Ticket9440

Do you realize today’s was the biggest validation for AMDs tech stack and that NVDA monopoly is no longer? That AMD will gain more and more market share on AI? I don’t even care if CAPEX slows, AMDs revenue will keep growing. Let me put this simply: stock keep going up!

Warm-Finger-5879

The podcast animal spirits touched on this topic very well they stated that their are two outcomes possible for this “bubble” 1. The bubble pops because of high valuations and the ROI is not being realized from the amounts poured into CAPEX and market gets hammered 2. The bubble doesn’t pop the Massive CAPEX and ROI goes into effect and the efficiency of Ai that causes a significant amount of jobs being replaced causing a spike in unemployment and people with no jobs. The other case is that their is a long period of Ai slowly trudging through and that this bubble has become legit and is not a bubble and that within time the effect of AI efficiency will be realized much later in time.

Coley44

Yeah they've just had a public offering before it broke over $100 to get the CAPEX required for the MSFT deal vs CRWV who still is fundamentally solid but carries a lot of debt given Nvidia is buying all their spare capacity through to like 2031. NBIS have a stellar deal and considering GPUs will still be leveraged for their compute regardless of whether it's AI bullshit or just machine learning for like medical industries and other software that is accelerated via GPUs means they're likely going to find themselves in heavy and consistent demand imo. I think they'll still experience a retraction from whatever highs we see as the bubble bursts or fizzles out but will continue to grow consistently. Long term high conviction hold for me either until I can get 400 shares at an average price of $250-300 or until 2032. Whichever comes sooner. Really it's getting enough cash to buy the shares that I'm concerned about lmaooo

shivaswrath

I think the official declaration of the recession we are in + AI CAPEX cooling. Then I think investors will cool off on the influx into the market and there will be less BTFD

ChairmanMeow1986

CAPEX from large caps

Negative_Profile_528

The question to ask is - Is the capacity being added by the hyperscalers based on their CAPEX going to be absorbed by the ultimate corporate end-users. I am not talking about OpenAI or the myriad AI startups in the middle of this usage pipeline. So basically If the hyperscalers are 5x-ing capacity (just throwing numbers around) but corporate use is only going to 3X over the same timeframe. Is that not sign of a bubble? Would be interesting to see further analysis on this but my very cursory research has told me that no, the rate of corporate AI adoption is not in the same order as the capacity growth. In this case we’ll see a race to the bottom as far as pricing.

MutaliskGluon

apparently the solution is BURNING MONEY ON CAPEX WITH NO FUCKING RETURNS

whodey84

Like what? more CAPEX circle jerks? 0 breakthroughs in monetizing or AI tech

Coley44

EOY $200 isn't unreasonable at current pace. If they get a few more billion dollar deals we're looking at $500 before end of decade or something crazy. Def a stock split on the way for them to get more CAPEX at that point.

Aghanims

In terms of an overall market downfall? I don't see it tbh, we're far from real ATH due to weakening dollar. There won't be an AI bubble pop like dotcom. What will happen is several of the AI companies gives up and there ends up being an oligopoly between 3-4 overwhelmingly dominant AI companies. So I'd expect an overall sideways movement for people that are holding a general AI ETF and aren't concentrated on a single ticker, but there will be clear winners and losers. The big guaranteed losers are chip manufacturers. All of the AI companies that lose will add a glut of excess computing power back into the market that yield cheaper CAPEX costs. tl;dr MAG7 is probably still good to go. Meta is being absolutely stupid until Zuckertucker figures out how to make a non-garbage version of MetaGlass that gets widespread adoption (needs to partner with a telecom provider and have LTE connectivity.)

blissfulfinance

Microsoft or Amazon announce that will reduce their CAPEX next year in 1%

Marko-2091

I disagree because although the barrel is slightly higher, anything else is way more expensive. You can see this in oil and gas companies that are struggling with very high CAPEX costs for new projects. If this continues there might be an energy crunch because new projects are not profitable enough to be executed. Think about it, low barrel price, high CAPEX, high interest rates and in some cases higher salaries.

iSoLost

Stock goes up. It doesn’t have any effect on AI n CAPEX, all 3 major indexes r currently held up by nvda

Finprothrow

You’re not seriously suggesting that fiber optic cables have the same use flexibility as GPUs, are you? In ‘99 the NASDAQ hit a P/E of 90. The average price-to-sales of tech companies going public in 2000 was 49. Is it intellectually honest to say today is similar? Internet companies were spending everything on marketing and branding, hoping to somehow monetize down the line without any real revenue plan. There isn’t any direct analog to something like Pets.com today outside of crypto (separate discussion). Yes there are some parallels to the .combubble given the massive investments in a new technology, but with enough scrutiny you’ll understand these situations are not the same. Too much CAPEX into valuable hard assets by well-run, profitable companies to call these scenarios the same. A bear market will come eventually. But it’s not now or any time soon. Stay out of (or short!) this unprecedented market at your own risk.

Finprothrow

Outdated metric. 401ks replaced pensions and everyone can buy stocks on their phone now. Way more public participation. Stock prices follow earnings, and earnings continue to exceed expectations. In the dot-com bubble those companies weren’t making money. Not so with the Mag 7. And all that compute they are buying? Even if AI flips, these aren’t useless assets they are investing in. Computing power has value — they’ll find a way to use it. Tailwinds: rate cuts, wealth effect among high earners, moderating inflation, unprecedented CAPEX spending. Some deregulation. There’s $7T in cash on the sidelines rn. Where’s that gonna go when rates keep dropping? We are due for a pullback. But those are healthy. April showed us that even a massive selloff will be followed by retail and eventually institutions buying the dip. We have been in a bull market. We are in a bull market. That means get invested and stay invested. These days if it takes you 3 years to be proven right, you’re wrong. So get while the getting is good — especially those in the wealth accumulation phase of their lives. If you’re right around retirement age it’s a different conversation.

Jazzlike_Thanks_1869

I bought LEAPS in addition to my shares. I got into IREN at $9 and HIVE at $1.77 when I was doing my DD on APLD and was doing a competitive contrast analysis, I got Lucky. I believe HIVE can hit $10 in early 2026 if they execute on their HPC strategy. It’s CAPEX extensive so a capital raise / dilution is a real possibility. I believe $3 Jan 2028 Leaps are the play here.

HartbrakeFL21

I'd argue it's less fraudulent activity, and more the gamification that server warehouses, billions of dollars on CAPEX to build in AI technology, and the advantage of deep pockets versus everyone else. It's not illegal, but it is unfair.

No_Baseball7384

AI is clearly a bubble, it can/will pop. But I also believe that it is paradigm shifting as much as the internet (2000 bubble pop) and steam engine (1929 bubble pop). It all boils down to valuation, but the net earnings of the major AI players have been keeping pace with stock price appreciation to a certain degree so it's hard to say they're completely overvalued, especially if they can continue/increase their earnings growth rate as a direct result of their AI CAPEX. They're certainly betting like it will and then some.

Pinkrocket2347

The whole market is up on the promise of AI growth and profits. These companies are in the hole by like -$1 Trillion in CAPEX

Primsun

It isn't really easily predictable. In theory you could lay out firms' CAPEX and revenue growth projections, analysts projections, and market size estimates to see about "when" we may get a clear signal on under performance. However, that is assuming others don't do the same and try to preempt each other. \--- I assume it won't, and that it will take some bad signals about a lack of return or revenue growth when approaching Q2 or Q3 reporting, next year to cause a rethink of the narrative. However, if I was confident enough to make a meaningful bet on it I would be doing that instead of typing this comment.

typeIIcivilization

What does an 800 billion shortfall in revenues needed to fund the demand for AI compute mean? Is this referencing 800 billion in additional CAPEX spend?

Pwndimonium

You’re not gonna mention AI CAPEX spend??? Otherwise totally agree.

Brawmethius

Correct as a market veterinarian I have tried to help poor sick ber from losing money. My actual guess with out another major market event causing a flight from risk; would be about 2028 as most major ROI forecasting is 5 years out and CAPEX cycle started roughly 2023. Not a deep dive DD but just an estimate based upon historical ROI expectations for larger CAPEX spends. If 5 years in and missing forecast projects start getting axed.

Brawmethius

PSA FOR BER: Usually I just like to dunk on you, but here is some actual veteran market advice. Seeing a bubble is not enough to time or bet against a bubble. In CAPEX cycles investors expect to see CAPEX spend, they don't get spooked until they don't see revenue on end users. That means the CAPEX party is over, and the "does this make fucking money" party begins. If you want to ber, start trying to work out when this transition is going to be happening, CAPEX cycles fuel themselves. CAPEX cycle is strong right now, they never are rational, stop trying to understand it and start trying to work out when end-user-revenue is going to take the limelight.

skilliard7

MAG7 is going to be constrained in their ability to buy back shares because of how much they are spending on CAPEX or investment like these.

sccm_sometimes

Yeah, that's exactly the point I'm trying to make. $60b in CAPEX to build and own datacenters for many years to come is reasonable. $60b in OpEX to rent compute power for 1 year is so off the charts that it doesn't make any sense.

Brawmethius

Many. First CAPEX super cycle is it? They all go same, there is investor enthusiasim for some new thing, they flow in money to infrastructure builders. Money gets promised in contracts between all major players. Party rips. Only way they ever burst is eventually the customer side starts reporting no revenue in time frames investors expect it. Right now investors only expect to see CAPEX spend, not revenue on end users. Party goes on until then.

auradragon1

> The figures for the big 4 are CAPEX. Meaning that's what they spent to actually build new data centers. That includes real estate, construction, and all the server hardware that goes into them. They OWN these data centers. > > As far as I can tell, this deal isn't Oracle building data centers which OpenAI is going to own - it's strictly for compute power which OpenAI is going to RENT from Oracle (OpEX). > > By not owning these data centers, OpenAI can get more compute for the dollar spent. It's not a negative. IE. Their $60b will get more compute that year. Probably a lot more.

sccm_sometimes

> On average, it's $60b/year which is less than what other big AI players are spending now. The deal looks very reasonable from this perspective. It's less per year than what Google, Amazon, Microsoft, Meta are already paying in **datacenter capex** in 2025. - Meta - $72b - Google - $75b - Microsoft - $80b - Amazon - $100b IMO you arrived at the wrong conclusion despite the answer clearly being right there in your post. The figures for the big 4 are CAPEX. Meaning that's what they spent to actually build new data centers. That includes real estate, construction, and all the server hardware that goes into them. They OWN these data centers. As far as I can tell, this deal isn't Oracle building data centers which OpenAI is going to own - it's strictly for compute power which OpenAI is going to RENT from Oracle (OpEX). Your comparison is like saying, "*Bob spent $50k to buy a car, so it's perfectly normal for Steve to spend $40k to rent a car.*" For comparison, Azure's annual revenue is $75B and Google Cloud's annual revenue is $58B. So OpenAI, by itself, is going to spend as much on cloud compute as ALL of Azure/GCP's customers? Also, Oracle's annual revenue is $59B. OpenAI is going to pay more in revenue than all of Oracle's other businesses combined? Even if we accept at face value that OpenAI has the funding secured to come through on their end of the deal. I'm assuming Oracle doesn't just have $60B worth of compute power sitting in their back pocket, so it would need to be built out within the next 2-3 years. Does Oracle even have the manpower to build out that much infrastructure (basically the size of Azure today) based on the timeline of the deal? The proposed reasoning behind this deal is that the big 4 can't build out new capacity fast enough to fulfill demand, but somehow Oracle doesn't have this problem? Data centers have become so commoditized that it doesn't really matter anymore who builds them. Most of the existing prime locations (such as North VA) are oversaturated so everyone's scrambling to find new places to build. The biggest constraints are now water/cooling/power and because of that the bottleneck is now dealing with increased resistance to new data center construction from regulatory road blocks and hostility from the area residents. I think this deal is more likely an *option* for OpenAI to purchase *up to* $300bn in compute power, rather than a commitment to that amount.

Mediocre_Wave_7441

At full scales with MSFT revenues rolling in i dont think CAPEX as Percentage of Revenue will be even close to 100%. Also, they are a low working capital business. EBITDA margins sclaing brings them cash.

Mediocre_Wave_7441

EPS negative bcz of Depreciation, non cash expense (accounting expense and not an economic expense) as Capex already incurred. With EBITDA positive they will be CF positive at some soon, its cash what matters. Although they need future CAPEX but that will be funded through revenue and if they can improve EBITDA margins this means cash.

absolute_cinema81

It’s crazy how much the utility sector has changed over the last several years. This is an industry that historically is about as slow, plodding growth as you could imagine, but data center (especially AI) growth has caused utilities and RTOs to completely revise their projection models and CAPEX spending. If you look in like 2019 or 2020, what utilities projected in terms of electricity demand by 2030, it is so much less than what they’re projecting now. We need tons more generation, transmission, distribution, storage… literally everything.

hopelesslysarcastic

Based on what sources that aren’t opinion pieces from likes of The Information who base it solely on “insider sources”. Where are the exact unit economics you’re referencing? Them losing money on revenue via CAPEX is a fuckload different than them losing it via OPEX costs like model training or inference. What are you saying they are losing money on.

alloutofchewingum

Value trap. High debt, dividend commitments, shrinking revenue base, ever increasing CAPEX to overlay more fiber. At some point you can't square that circle.

dj_samuelitobx

Corning (GLW) up 20% for month, gaining  approx 1% A DAY. Easy steady gains and reliable calls and leaps. I've been singing this stock's praises-- and honestly you should too.  Apple invested 2.5 Billion into their Kentucky plant. They supply phone screens to all the major manufacturers. Gorilla Glass? That's them. Foldable screens? That's them. Every new device needs new designs that are coming straight out of GLW's huge R&D budget.  They supply tons of optical glass for fiber connections-- that's data centers, to the point. The CAPEX is coming and it's not stopping. People need this shit and they are the plug.  Corning to $100 EoY.  Buying calls @$85 w/ a 1/16/2026 EXP

Slightly-Blasted

Nvidia will die if there’s any scenario in which companies don’t need to buy their GPU’s en masse anymore. That could be efficiency of models, hardware, any of the mag 7 developing their own chips, etc. Anything that threatens the billions of CAPEX from the mag 7 on chips.

GeneralOwn5333

Don’t if rates gets cut, more cheap money will go to AI and Corporate CAPEX. This accelerates more job cuts.

Sabunit

Told you guys, the narrative is shifting. Sure, there can still be a dump, but 20M on op-en from institutions says something. If the FED doesn’t lower rates, bad timing - it’s the week before MU earnings. If the FED does lower rates, it’s great for CAPEX, and MU gets a strong positive sentiment into earnings. Institutions already know earnings will be solid. Either they sell the news and try to trap retail FOMO now, or they’re scaling for a bigger move. Long run is clearly in favor. There will be pumps and dumps on the way, but the ratings are shifting, ETFs are reallocating, and the ‘cyclical RAM’ narrative is finally fading. You can take some profits to protect your gains. $65 was this year as well, can you imagine?

Overlord1317

> Seriously, wtf is wrong with NVDA? Get back up to 180. It's market cap is based on essentially one line of products (albeit, a very broad line) and insane CAPEX spending. It'll go to 3.5 trillion before it ever hits 5 trillion.

FinnishSpeculator

NVDA, TSMC and Oracle have great earnings because of the CAPEX boom. This boom is happening because AI hyperscalers think LLMs will be hugely profitable for them. If they are mistaken, the CAPEX boom will be over very rapidly. There are more and more indications that LLMs will be a commodity product with incremental improvements and no AGI/superintelligence capabilities.

DropoutDreamer

Anthropic pays Amazon $1bn who pays Oracle $1bn who pays Nvidia $1bn 1bn creates 3bn of AI CAPEX spend. And youre bearish on AI?

HeightSea5673

ORCL the new meme like TSLA in 2021, that fraudulent growth forecast is hilarious. They are actually projecting META MSFT and GOOG to spend 6x CAPEX in the next 3 years lmao. great time to buy puts June 26 out

MaterialGuy007

ORCL - cannot make sense of 2026 $35B CAPEX but they'll still miss next quarter guidance? Another case of smoke n mirrors..... Nowhere did they time backlog - it could be 20 years out....

MysteriousDiscount6

no job growth is bullish because no jobs = AI doing everything = more CAPEX...don't you guys get it???

Sick0h

Sir, another CAPEX has just hit the AI market.

VOO_bull_forever

# WHERE IS THE ROI ON AI? GIANTASS CAPEX SPENDING (AT AN EVER INCREASING RATE) BUT WHERE IS THE CASHFLOW? # or maybe it is the biggest bubble in history... just saying, I am saying

Narrow_Shoulder2344

as of now SPY is up 20% in 1Y on pure AI Hype. Amazing. Fascinating. Gorgeous. 20% growth on NVDA selling 42% of his total revenue to 3 MAG7 companies. About 50% of all CAPEX this year spent on AI datacenter. Wonder what could happen if MSFT,AMZN and META decide to stop building datacenters and buying GPUs. This can't go tits up

aktien_alex

Interesting take, thanks for sharing. I get the concerns about CAPEX and political uncertainty, that’s definitely a headwind. On the AI side though, I’m wondering if Adobe’s integration (Firefly, Photoshop/Illustrator AI tools, etc.) could actually strengthen their moat instead of eroding it. A lot of creative professionals are already locked into the ecosystem, so even if AI changes workflows, they might still rely on Adobe as the platform. Do you think the risk is more about slowing growth in the short term, or an actual long-term disruption of the business model?

dougieg987

Because I was balls deep and losing money. For real though, severe under performance with great fundamentals. Unfortunately they are in an industry that is reliant on CAPEX which companies have not been throwing around with a lot of the political uncertainty surrounding us. Although they claim to be using AI, I feel like they are actually being replaced by AI which could mean fundamentals may follow suit in time. I feel like CRM may be fighting the same fight unfortunately

Much-Creme1362

Step 1: Put CAPEX into new tech that replaces workers so we can sell consumer goods with very high profit margins! Step 2: Where did all our customers go?

Remarkable-Drive3503

Comms is fucking flying! The very same guys that are plowing big billions into CAPEX buying the latest gizmos from the tech guys. But tech is getting obiliterated. Make it make sense for me man....

gamjatang111

i like miners because during the previous gold peak in 2013 they overshot CAPEX and now are finally cashing in the benefits. You can see miners share price growing faster than gold prices during this boom. Keep your eyes on capex and wages. Since those factors are sticky in the short term but variable in the long run, it could reduce their margins in the future.

MutaliskGluon

First off, future earnings estimates are just estimates. Earnings estimates historically are almost always adjusted down, so your 14x will change to 15x in the near future. Secondly, EBITDA is a bad metric to use when comparing these stocks to a few years ago as they are a lot more capital intensive now. Their multiples for EBITDA EV should decrease with increasing CAPEX. Thirdly, and most importantly, these companies are all overstating earnings with awful accounting and using borderline fraudulent depreciation curves. 10 Years to depreciate a GPU that gets replaced in 18 to 36 months is fucking whack.

backnarkle48

Doesn’t matter. Analysts want to see growth and outperformance every quarter. If any of NVDA’s buyers slow down their purchases (a very serious possibility given the current state of scaling ceilings and insane CAPEX projections), the knock-on will be swift and painful

Aspirin_Dispenser

Remember that CDOs were only part of the problem during the mortgage crisis. What took the mortgage crisis and ballooned it into a full scale global economic crisis was the absurd size of the CDO derivatives market. That multi-trillion dollar market was the explosive sitting inside the burning warehouse. A *potential* problem of a similar nature exists within the growing ETF market. I don’t believe that the issue is anywhere near the size of what was posed by the CDO derivatives market, but the mechanics of the problem are similar. As the ETF market grows, it increases sectoral asset correlation, increases volatility, and amplifies rallies and sell-offs. In particular, growing reliance on ETFs for sectoral investing can spread the decline of a single heavily weighted asset across the entire sector. That said, while the growing ETF market certainly has an effect, it’s no where near the size of the effect that CDOs and CDO derivatives had. However, bond ETFs, believe it or not, carry significant risks to the broader economy. Enough so that The FED and the SEC have identified the liquidity mismatch between bond ETFs and the actual bond market as a systemic risk. In short, large outflows from bond ETFs could trigger a sell off in the relatively illiquid bond market, which would skyrocket yields, make financing increasingly expensive, and raise default risks. This credit-crunch would then lead to declining corporate CAPEX and even spell out lay-offs and bankruptcy for credit dependent companies. The end result would be a massive amplification of whatever triggered the initial sell-off that spills into the broader economy in a manner similar to the 2008 mortgage crisis. We actually came very close to seeing this happen in 2020.

skilliard7

Not moving the goalposts, being \#3 isn't good enough in an industry that requires tremendus R&D expense and capital expenditures. Who is the \#3 maker of AI chips/GPUs? Who is the \#3 maker of commercial airliners? If you look at who's behind them, it's all models that were trained on very low budgets. Deepseek, for example, had a $7 Million budget. In comparison, Google spent $52.5 Billion in CAPEX in 2024 and intends to spend much more in 2025.

Interesting-Escape60

Just had a few people from CAPEX TRADING force me on buying PLTR. Dude hung up angry with me because I wouldn't buy the stock.

Technically_Tactical

LOL $NVDA went green after reporting their lowest QoQ growth since 2023. They said what we've all noticed: AI CAPEX peaked late 2024.

elTaconeDeSantiago

They got DoD money from both administrations. If the rapidSX is successfully comissioned (next year, by the way) and it actually provide lower CAPEX and OPEX as they (and the DoD) believe it will bring the whole country to a next level when it comes of reduced dependecy of chinese REEs. Of course it is pre-revenue phase and the rapidSX is not yet completed, but given how critical for US and the rest of the western countries to get rid of such dependency and even to have the upper hand in this sector combined with the fact that not many companies are doing this and when they do, it is still the traditional way which consume tons of chemicals and requires a real lot of space and infrastructure, I would put my chips on the possibility that it is pretty much poised to happen. Also, no administration would want to see its whole tech sector collapsed because china decided to do so.

RivetHeadRK

You lost me at ‘CAPEX’ but I’m still all in.

ArteezyILLEGAL

Curious to see what is your estimates on the CAPEX. Regardless, it's to make sense off the capital expenditure CRWV has published in their FY25 outlook. The 20b\~23b includes acquisition of Core Scientific. My current guess is 600MW (Active) by Q3, and 900MW EOY.

timeye13

Prediction from the crystal ball(z): they’re gonna miss that 900mW target by a long shot, and the CAPEX numbers you’re evangelizing are way EAY off. But stonk go up. That part is correct.

Euphoric-Guess-1277

It’s P/E is already like 60, and they’ve already more or less hit the CAPEX limits of their large customers. Even if the AI boom continues unabated, it will take an entire lifetime for NVDA shareholders to make their money back

teamyg

NVDA should have a double-beat, and a great guidance with CAPEX increases. The massive shake-out last week tells me it's gonna 🚀🚀🚀 The only uncertainty is how far can it reach, 19x or 200.

Colonel707

The high P/E stock can continue to grow as long as it continues to delivers on the growth of key financial metrics (Sales, Operating Revenue, Net Profit) and/or the guidance from company’s management/industry analysts is being revised higher. Back in 2024 Nvidia was already getting expensive and many people probably thought that it’s cycle peak. Next thing you know Nvidia is launching new advanced chip, companies revise their AI-related CAPEX higher and demand for chips just continues to march higher…. The problem of buying at the top and stock crashing 50-70% in next few months is probably related to concept stocks - a lot of growth is priced in from the launch of new products (that are not yet available) and company is unprofitable/leverage is also rising.

Fractious_Cactus

It's true though. If any of them say that they're pulling back on CAPEX their stock craters.  OP is right.  The rest of you are actually incredibly ignorant 

ndwillia

AI is a scam - the only company making money off AI is NVIDIA, because they sell the GPU's. Our economy is propped up on MAG7 AI CAPEX.

Aspirin_Dispenser

Per usual, the rational take is at the very bottom of the thread. I don’t disagree that there is a bubble surrounding the AI trade. However, companies like Nvidia aren’t the Ciscos of the AI trade. Cisco had a peak P/E of 472 in 1999. That’s wildly high even by today’s standards. Nvidia, on the other hand, currently has a P/E of 56. That puts them more in line with Microsoft at its peak prior to the crash, which now trades at 10x its dotcom highs. They will take a huge hit when this thing pops, just as Microsoft did, but they’re more than well positioned to come out the other side in much the same way. Point being: the hardware and software ecosystem that enables AI isn’t the bubble. Nor are the companies that are thoughtfully implementing AI to the benefit of their productivity. The bubble is the companies that you just described. The companies that are repackaging someone else’s models into poorly specialized assistants. The companies that are half-ass implementing AI into their workflows. The companies that are capitalizing on a CAPEX ramp that will inevitably fade. Those companies, much like the dozens of search engines, dial-up providers, advertisers, and infrastructure firms during the dot-com bubble, will get crushed. Some will disappear entirely while others will revert back to their pre-bubble valuation and never get close to it again. However, the companies that are offering truly useful hardware and software that are integral to AI or that are making a concerted effort to implement AI tools that are specifically tailored to their processes and generate tangible productivity gains will come out the other side strong and ready to capitalize on consolidation.

Aravinda82

That’s the thing though, cutting short term rates isn’t necessarily going to lead to lower longer term rates. Also, you’re not going to get large CAPEX investment while there’s still demand destruction due to tariffs so lowering interest rates isn’t going to change that while tariffs are in place. We’re already starting to see that and we’ll only see more demand destruction as the tariffs increases continue to make their way through the system and get passed on to consumers more and more. Lowering interest rates can help IF the tariffs were temporary but they’re not. They’re staying on indefinitely. More investment into AI and automation isn’t going to help the lower unemployment at all, it’ll do the opposite.

aliveintucson325

If you want to make money, start checking out ORCL ahead of Sep earnings. Last earnings call was insane. They had a customer order ALL available data storage. RPO is through the roof as they try to keep up with limitless demand. Tripled CAPEX. Laid off 11k employees last week to free up more cash to further invest in data center expansion. AI is a gold rush and ORCL is selling shovels.

Brokenandburnt

And now the magic bullet of LLM's has shown up.\ The hype driven by Zuck, Altman and their ilk is designed to justify the truly insane CAPEX to their investors. Tbf, CEO's and business leaders in general are only human. The approximate same ratio of smart/dumb are equal in them.\ Some of them either believe the hype, or are desperate to boost profits before earnings. And layoffs are the fastest way to increase short-term profits. The job market for computer science grads are the worst it's been, and not everything shows up on Job numbers. The current bubble will burst sooner or later, leaving the strong companies as usual. Even if AI won't live up to the hype, it will still reduce Jr jobs.

Brokenandburnt

Of course they claim increased productivity. If they said that no, infact they do a shitty job unless used as a tool by competent staff. They can't replace workers.  Such a statement to shareholders would make the CAPEX very hard to justify.