CAPEX

13jfncjai31

An EXIM Letter of Interest is preliminary debt, not a non-dilutive grant. To unlock the US456M debt facility, standard project finance mandates a 30% to 40% equity contribution. ARR must independently raise 130-180 million dollars to access those funds. Since ARR’s current market cap is ~US$100M, they would have to issue more shares than currently exist, guaranteeing severe dilution before commercial production begins. Also, the resource grade is around 0.329% TREO. Getting anything economical at this grade requires massive bulk-tonnage mining operations, making the half-billion-dollar CAPEX unavoidable. There is something to be said about the strategic value of a domestic RRE mine but the main thing holding up RRE production is the processing and refining not the actual mining of the stuff. I just think there are better critical mineral plays that don’t threaten to dilute shareholders into infinity. Executive pedigree does not alter the mathematics of capital dilution. I’m not saying there’s no chance this mine gets built, I’m saying just because it does doesn’t mean shareholders don’t get fucked.

StocksStormTrooper

META is contemplating of massive layoffs because Ai build up cost is mounting! Yeah, they made $200B in 2025… but spent $117B in employment cost and $73B in CAPEX for 2025!

michahell

Cool! How do you factor in the fact that locally running open source AI models is already a thing, and will be the default as everything IT related has a tendency to become cheaper and easier to run yourself? Where does that leave any CAPEX intensive businessmodel in 10-20 years?

crashnbash25

Well thats the thing. They have 0 operating costs lol. Their CAPEX spend last quarter was only $3mil

coldtacomeat

Do they say what they are spending all that CAPEX on? I have been watching Reddit and thinking about buying a bunch of shares but haven’t pulled the trigger.

13jfncjai31

The updated February 2025 Scoping Study for ARR Halleck Creek mine states the Initial CAPEX for the 3 Mtpa base case is US$456 Million. To reach the 6 Mtpa "billion-dollar potential" scenario, they need US$737 Million. This is a company that will have to get over half a billion dollars in CAPEX funding and quite literally move a mountain before there are any profitable returns on this thing. You can put money into it, and maybe the company will be worth something half a decade from now, but until then enjoy getting your stake diluted to nothing. Not only did you go out of your way to post prime ai slop images (worlds biggest RRE resource in the USA? You can’t even satirize that it’s so stupid), but you couldn’t even be bothered to spellcheck your text either.

crashnbash25

I dont believe reddit is a meme stock. Did you see their CAPEX spend? Thats what has me buying it. Ive been wrong before though but we will see within a year...

Own-Interest-7649

The year is 2028, America's oil and gas sector is 80% of the GDP with the remaining 20% being Al CAPEX. Median real wages are $5/yr in 2026 USD terms. LLMs have replaced net 43 data entry jobs and the rest of the datacenters are pumping out porn and cat videos, projecting profitability by 3030. LLMs stopped being used for software engineering because they kept on hallucinating big tits into the code. Israel has expanded its terror campaign as far as Macedonia and the Bosnians are getting scared. Russia has advanced the frontlines 34cm in Ukraine and is offering cash bonuses to any young men willing to immigrate. China built a pontoon boat and is walking it back and forth along the coastline across from Taiwan menacingly.

pink_ego_box

QQQ about to absolutely shit itself without Saudi money and private credit to pay for unsustainable data center CAPEX.

Rude_Judgment7928

That is do-do crude. I used to buy it. 55% Vac Resid. 5mgKOH/g TAN. Santa Maria refinery that was build for purpose for said crude closed 2 years ago. Production a measly 20,000BBL/day at shutdown. No way it's improved with the field inactive. Just a nothing burger. Sable fleecing investors (no way they return the CAPEX for All-American Plains pipeline repair). Oh and future tax payers when they default on remediation.

greenpride32

For sure it's CAPEX spend - during last quarter earnings they projected $200b spend in 2026, up from some $125-130 prior FY. I'd have to say that was the biggest driver in pushing the share price down after earnings.

greenpride32

OpenAI and Anthropic already have ARR in the $20b+ range - they are just getting started and growth rate is very high. Those amounts already puts them ahead of hundreds of companies in the SP500 in top line so their markets appear quite large. Have you been keeping up with the news? The US government is already heavily using Anthropic - well at least they were... Regarding the hyperscalers - it takes at least a few years to plan, construct and online an AI datacenter. Why are they building so many of them? Because existing capacity has already been reached. That is why your so called "neo clouds" are able to grow revenue so quickly. Your CRWV NBIS IREN and non-public Lambda and filling in the shortages that even your megacaps and fronteir LLM companies are buying capacity from them. So what happens when the big hyperscalers start onlining these brand new shiny AI datacenters that have huge engergy and GPU costs? The companies will charge a rate that gives them a path to ROI. Do you believe these megacap companies that produce $75-125b in profit each year (and growing) wouldn't have considered such a basic business/finance concept? Also consider that big portions of AI datacenter cost is useful for decade (cooling, security) or decades (land, building) and only some amounts need replacing every few to several years. Main point is if I'm spending $80-100b CAPEX per year for a few to several years, does not mean I need to make additional profit of $80-100b each and every year to just break even. The "cost" of the resource is stretched out to several to dozens of years. I entered the workforce during the dotcom boom and I worked in tech and big tech/Mag7. During that time, many "dot com" stocks had propped up valutions that were 1-5% intrinsic value (this is what you call a bubble) if even that and the rest "potential". It's a very different landscape compared to today. The companies profiting from AI are predominantly long established and historically profitable companies who just found a new runway of growth - GPU, rack systems, memory, storage, power and cooling infrastructure, cabling, networking, hyperscalers, chip design and testing etc.

InfoLib_

AI is 100% not profitable. Revenue growth is astounding, you're right, but they are burning billions to hundreds of billions for said growth. How quickly will this disconnect be fixed? At what point will revenue come without insane CAPEX expenditures and be self-sufficient?

ai-moderator

#TLDR The AI hype is Dotcom Bubble 2.0. Tech giants and startups are burning billions in debt-fueled CAPEX on data centers and chips with massive P/E ratios and little to no proof of actual profitability. Furthermore, the physical energy infrastructure (like nuclear power plants) needed to sustain this massive AI grid is up to a decade away. Once private equity liquidity dries up or investors realize the promised ROI isn't materializing, a violent tech correction is inevitable. --- Ticker: QQQ / VIX Direction: Down (Tech) / Up (Volatility) Prognosis: QQQ $600 Puts and VIX 35/40 & 45/50 Call Debit Spreads Catalyst: Investors realizing ChatGPT can't pay the electricity bill Vibe check: March 2000 Panic Selling

ai-moderator

#TLDR --- **Ticker:** QQQ & VIX **Direction:** Down (Tech) / Up (Volatility) **Prognosis:** Buy QQQ $600 Puts and load up on VIX Call Spreads **Vibe:** Dot-Com Bubble 2: Electric Boogaloo **Catalyst:** Investors inevitably running out of patience (and gigawatts) when they realize it takes a decade to build the nuclear plants required to power Sam Altman's money-incinerating chatbots. **Summary:** The AI sector is completely overvalued, bloated on CAPEX debt, and operating on timeline expectations that are totally detached from reality. The moment liquidity tightens or tech companies are forced to show actual, standalone AI profits (instead of circular economy hype), the music stops and the market dumps.

Flat-Cockroach3676

alright here's why I think PLTR is going to go up tomorrow. It's down hard today -3% on nothing while everything is green or at least flat. Whatever happens in Middle East, it only helps Palantir. The biggest optimism is based on Oracle earnings, regardless of what happens they will announce shit ton of CAPEX spending on AI which is heavily tied to PLTR, NVDA, MSFT, and cloud stocks. 160 strike 3/13 expiring is at $0.60. That's a 10 bagger right there I have 20 options.

LongevitySpinach

Wow, an actual well articulated bear case. Thanks. 1. Agree, the main risk is hyperscalers pull back on capex and we don't know when they might do that. Along with that question, do they start seeing returns on that CAPEX? Anthropic is getting those returns. OpenAI isn't. Meta claims they are, but there's skepticisim about them. 2. the NIMBYs have been amplified even by the Oval Office. This could get ugly as midterm politics unfold. This is bearish for datacenters, bullish for companies providing solutions to the energy bottleneck. 3. Private credit has potential black swan implications for the entire market, and it's not just AI infrastructure. Tricolor (auto parts), Pabst (beer), guitar center (rock n roll!)... But that last line though, I disagree that markets are pricing in maximum good news. They are discounting maximum good news and pricing in future bad news. The market is so defensive right now. Walmart trading at absurd multiple.

MeeseShoop

Oracle just fired tens of thousands of people so that money can be used for AI CAPEX, the market will likely like that.

AlarmedPelican

>Oracle and OpenAI End Plans to Expand Flagship Data Center Iran is stealing the spotlight. This story is not getting the attention it deserves; there will be more pullbacks in AI CAPEX in the coming weeks/months. Careful

Marko-2091

Maybe but pets.com was not burning 100B of CAPEX is bs

Unassisted3P

Are we sure that, that is the goal of the MMs and funds? I guess we are making that assumption based solely on the price action? Not invalidating the price action just trying to understand if there is more evidence of that happening. I agree with the CAPEX though and valuation on P/E and other multiples have clearly been out of whack. My brain (which is relatively smooth) tells me that we could go another year with negative cash flows and people will still buy thinking that it will pay off. Ie, we need to see more results of the crazy CAPEX (and the results need to be poor) before everyone realizes that tech and the mag7 is over valued. By "people" though, that could just be retail and the MMs are already ahead of it.

pink_ego_box

The drawings indicate a distribution, market makers and hedge funds slowly selling their tech bags to retail and pension funds. Just slowly enough for the price to stay flat. At some point they'll let the volume die, just in time for the Bag7 to report negative cash flows due to their crazy CAPEX. Then retail is left holding the bag while the price corrects to more reasonable historical P/E. The graph is called a Wyckoff movement. Bag7 is doing a textbook movement right now.

NEO71011

Look at the cash flow mate it's priced like a dying company because it is dying. While it's priced to perfection they haven't had positive operating income for years and the revenue has started to drop also they are generating cash flow from dilution. While all of this is standard in a micro cap look at the CAPEX there is none. How do they expect to grow without spending money or scanning up? Because so far this operation is only burning money.

guy_cloutier

CAPEX

peanuts-in-my-jelly

but is MOAR TECH CAPEX priced in?

Chubacca26

And with Cloud. It's a big value play, folks are overreacting to the CAPEX. It'll be paid off in no time, especially if SpaceX IPOs, that's an easy 100B or so, depending on which valuation is given to SpaceX..

Tight_One_1400

The AI infrastructure being built is being built to be used globally. GPT, Gemini and Claude are used globally. Companies are betting they'll be able to make it back and then some, by charging everyone on the planet a hefty subscription - or every business on the planet and very hefty commission or fee. Regardless - why would the money being spend on AI go to Americans via check? Its not gov money - its CAPEX. At best, it could be spent on buybacks or dividends - but big tech is priced with high PE's because they don't 'waste' money on dividends but keep gambling on the next big thing.

Bravadette

iirc, CAPEX increase in RKLB (for good reasons) anx also ASTS is gonna actually start services this year (apparently)

salty0waldo

The valuation definitely got reset, so not a terrible price here. The other issue I think is the increase in CAPEX through debt that will eat into FCF.

owter12

I don’t think the market is fully pricing in the fact that this might not be a cyclical play anymore. It’s pricing the possibility, but if it comes to fruition and LTAs become the main business model, they’re going to be swimming in cash. Margins will definitely go down as supply hits the market in a few years but I don’t think the market is pricing the sheer amount of compute and infrastructure that still needs to be built to meet demand. This bubble isn’t slowing down. Just look at the reported CAPEX for this year and the layoffs. Hyperscalers are dropping human capital to fund AI infrastructure buildouts

PrestigiousAccess765

Especially nit given their PE of around 10 and demand further increasing to hyperscalers CAPEX increases for 2026

ElmoLovesGrover

A few examples to show what is going with big tech these days. These examples can apply to dozens of other tech stocks: MSFT has excellent earnings in late January and sells off big anyway. Capex and software gettign eaten by AI are blamed for the sell off AMZN has excellent earnings a few weeks alter and sells off big too. Can't blame software so blame only CAPEX. NVDA this week has not just excellent, but excellently amazing stupendous phenomenal earnings... and sells off almost 10% over two days. They can't blame AI software fears, can't blame CAPEX (in fact NVDA is making massive bucks off others CAPEX), so they blame the generic catch-all "*valuation*". **Valuation!!** Are you kidding me? Here is NVDA forward PE according to Stock Analysis: 21.52 (note that MSFT and AMZNs forward PEs are 22.4 and 27.2). WMT, KO, and MCD have forward PEs of 43.7, 25.2, 25.8 (many other large cap "defensive" plays have similar PEs). That's right baby - NVDA's forward PE is *half* WMTs.... and people are saying NVDA is selling off because it is *overvalued*!! WMT, KO and MCD are all great companies, but they are not growth companies. It makes sense for them to have forward PEs in the high teens or low 20s. NVDA, AMZN and MSFT continue to grow at rates much, much faster than these three, yet their PEs are the same as the defensive plays no That's where sit right now. People are paying a premium for defensive plays and fleeing big tech growth plays giving many defensive/value plays PEs in the mid 20's (when they are typically in the high teens, low 20s) and giving big tech the same PEs as defensive/value plays.

Pinko1232

Profit was record, problem was CAPEX spending, should decline as more efficient planes come in and fuel costs fall

KittyLover-7

And then use it on ai CAPEX 😂

BigBossShadow

Because NVDA getting sold off is a giant red flag that the loans taken out for AI CAPEX is unsustainable. That long term growth thesis doesnt hold anymore. Therefore all of those "loans" arent going to pay out

zABros23

I agree with your sentiment. Earnings threw the kitchen sink and people were quick to judge. In reality, higher gold prices directly mean higher royalties = higher AISC. B2gold has a lot going for them this year, but it is entirely contingent on the gold price. Crazy how GDX/GDXJ have been moving the same as GLD, likely indicating that investors aren't confident the gold rally continues. Management credibility also took a hit due to higher AISC from stripping and Goose ramp, so the supposed "2026 will be our year" has now turned to 2027. Yes the prepay ends in June, but will the price of gold maintain its levels by then? Same with the ramp up in production with Goose. Would obviously be terrible to have insane CAPEX with Goose and them never fully produce at these high gold prices if gold crashes/corrects. Also, there's the uncertainty with the regional permit. People hate uncertainty more than bad news. What I do know is that everyone wants to buy the bottom, but not everyone wants to emotionally commit at the bottom. If no one wants to buy BTG, hopefully management picks up the slack and does it themselves. IMO this gold rally is just starting. DXY still relatively strong, short term rates still elevated.

KittyLover-7

It’s deflating, why are we being delusional, the moment we turned sour on CAPEX was the writing on the wall

95Daphne

I think we’ve moved on from yay AI to “which of Microsoft/Google/Facebook/Amazon are going to cut CAPEX first”and concern that it may impact employment.

seven0feleven

"CAPEX CAPEX CAPEX CAPEX CAPEX CAPEX" - Steve Ballmer probably...

anotherloserhere

Citron is dumb. Who cares about a moat here? Let me dissect it for you. NAND memory in itself is a tiny moat. Making semiconductors is a pretty CAPEX heavy activity. New tech, and even increasing current production, requires a lot of upfront money. But the other thing is almost EVERY company building data centers is sold out. Even the cooling pipe guys. As long as AI is still building, and as long as these companies are sold out through next year, it is a sellers market for them.

Whatdosheepdreamof

Honestly, I'm not playing this game with you. One month of Salesforce for a $1bn company is $25-100k. Ask accountant to pull forward a month, divert to CAPEX, move team over, define all output, execute. It's going to be a tax deduction anyway. Yea, might not work on first iter, but will show capacity for 60-70% of workflow within a couple of iters. Its already being worked on, not theoretical, in the process. People keep saying stuff like this... I couldn't do this a year ago. I can now. Can you extrapolate exponentials, because if you can't, you are going to be fucking shocked in 6 months time. Not years, months.

duddnddkslsep

These analysts are way out of their league, like how many more times does Jensen have to say that increased CAPEX -> more capacity to run GPUs -> generate tokens to satisfy agentic AI demand -> $$$$ ???

cxr_cxr2

But look… how much hyperscalers will actually earn from this massive increase in CAPEX is still entirely to be seen.

bladzalot

I am all in SPY puts... don't get too excited, he has not said a thing about CAPEX and it is already dropping...

bladzalot

Nobody was saying calls lol... everyone was posting massive put gambles on here all day long... I think NVDA is going to have an amazing earnings report, their guidance will be scary, their CAPEX will be massive, and the stock will drop before open tomorrow.

ai___________

The other Mag6 have collectively 800b CAPEX and you guys thought NVDA will miss LMAAAAOOOOO

Val44x

NVDA definitely smashes earnings and will be the catalyst for spy 700 Unless the market freaks out about CAPEX again

iwasshotbyatigeronce

Do you ever wonder why the Nvidia and OpenAI deal fell apart so recently, or at least completely reduced the total spend? It's because Nvidia watched the market react to obscene CAPEX and immediately made a pivot.

melvinzee

I dont think it matters anymore. The MAG 7 already projected massive 2026 CAPEX increase, thats more bullish for the entire industry than any guidance NVDA can give. Market should slowly decouple from this stock IMO.

guhhhh_MU

On a serious note.... How can NVDA earnings be bad considering the crazy CAPEX numbers big players have been announcing recently.... Calls on Everything PUTS on my health

tika_dengu

it’s mostly driven by TSMC, Samsung and SK Hynix. Doubt they are going down anytime soon given all the CAPEX going their way.

andytobbles

They’ll definitely save the market, you got 600B in CAPEX by 4 companies this year. That’s all money in NVDAs pocket. Semiconductors look primed to break out and carry the market upwards IMO. I imagine we see NVDA at 250-260 and AMD at 320-350 in the coming months.

NormalNature6969

Data Centers are dead. Look at OpenAI CAPEX reduction news. Adios.

InformalMeal9828

Fuck your puts fuck your calls CAPEX got you by the balls

xdr01

Pretty bullish assuming OpenAI will be around in 2030. Should of said CAPEX $2T, then deplete world of gaming mice until 2029, take IPO and rugpull.

Prestigious_Hope9190

It won't pay off. AI will not deliver ground breaking new worlds, and the CAPEX and deprecation of chips will significantly and negatively impact bottom line of Hyperscalers

Sandvicheater

All 3 are shares in solid blue chip companies that just getting taken for a red ride by Trump and AI CAPEX fears. Just HODL the shares until you're green time is on your side.

janon330

Its forward PE ratio is below many of its peers and below where it was at over a year ago. Where revenue only continues to grow. It’s trading at a lower premium currently than in the past. In an environment where they are going to see massive sales and growth due to the CAPEX budgets of the MAG7.

janon330

Imagine thinking a company trading at a very low PE ratio for all things considered and has been flat for 7 months. Beaten the last 14 earnings reports or so. Expected to crush the one this week. And all the other MAG7 tech stocks are spending about a Trillion dollars in CAPEX in 2026.... And youre going to call a company overrated who will see the biggest benefit to that? Post your put position or ban yourself from here.

KittyLover-7

This will be the earnings NVDA doesn’t sell off CAPEX commitments from others are getting bigger, insane margins, new chips soon, China back in play

Tight_One_1400

guidance weak...are you even seeing the CAPEX of every big tech right now? The stock may go down a couple percent because 'priced in' - but theres no chance of a guidance miss.

sailortyx56

Seeing a lot of these datacenter projects getting cancelled. More cancelled in 2 months of 2026 than entire 2025. A lot of CAPEX is not going to be spent. Lol.

ShittyUsernane1222

Macro economic indicators are overwhelmingly bearish: \-US debt crisis \-Japan debt crisis \-Global debt crisis \-Yen carry trade shenanigans \-US AI CAPEX and debt bubble \-Deindustrialization etc. etc. Bulls never even stood a chance.

Azisax

AI CAPEX = calls

No-Improvement3164

Amazon pumping now yet crashed on CAPEX spending? What is really going on

No-Improvement3164

CAPEX code word for money laundering/deregulation

DrElkSnout

OXY is mooning on CAPEX reduction, not Iran. Yes, we're breaking out on oil, but OXY is specifically rising due to a different set of news.

Pseudonym7369

I agree on some points, but what you didnt mention is the real ROI problem. OpenAI alone has a trillion (1,4 trillion) for future commitments and a revenue <30 billlion. Grwoth to accomplish that must be insane. AI does have productive usecases, but those dont justify this mass of CAPEX. Its only justified if one thing happens, and that is AGI which is mostly theorized is dependent on compute. China alone already tells different stories with their way more efficient models. And if this AGI superproducer wont happen, we might get this middle thing were AI is pretty good, gets used a lot, but again, cant generate this immense spending commitments. I am not a guy who says AI wont be a thing. I am saying, the financial way and the timeframe in which we are trying to achieve that is not sustainable. And if its not sustainable a lot of dependent Hyperscalers will get their revenue cut by a big part. And now think about growth stocks where the growth only slowed down... their rev is not collapsing, onyl getting slower (from over 20% to 5-15%). Those often crash to their new fair value to represent current business. If i extrapolate this to the AI sector, in which this huge CAPEX is justified by one thing (AGI) and only through more compute seemingly, then i am of a different opinion and say this wont go out in a nice way. Markets will realize, this CAPEX aint making sense, gotta scale back->scaleing back->revenue decline for dependent stocks->i. e. declines of over 40%

sorocknroll

I don't think so. Every company that surprised on CAPEX sold off post-earnings. Investors don't want these huge amounts of money spent. Realistically, some of these companies are going to waste the money and not become a leader in AI. Or never generate enough revenue to pay for the investment.

winston511

Fuck your puts, fuck your calls, CAPEX got you by the balls

tika_dengu

…and no CAPEX

Xray_Mind

You are vastly underestimating when you say “not a house of cards like 2008” Imagine all the deals announced for massive CAPEX on AI build out, especially for buildings and utilities. All these pieces are already moving and spending billions on labor and materials. Alot of these guys aren’t going to get paid or the contracts will void when it blows up. That’s over a trillion dollars of infrastructure builds wiped out

marcelowa

You aren't crazy, when looking at the fundamentals. AMZN is currently sitting on a TTM Revenue of over $716B and their margins have actually climbed to nearly 11.7%. People see 'High CAPEX' and panic about cash, but AMZN's TTM Net Income is already at $77B. Even with the massive spending, they are trading at a 28.8 P/E, which is historically cheap for them during an AWS growth cycle. $300 is a big psychological barrier, but the revenue to earnings trajectory actually supports it if they maintain this efficiency.

mixtape312

true, they lost it with the CAPEX spend

jshanklnd05

Nice analysis, I caught this too and took a mega overweight position after the Rubin announcement and subsequent selloff. Now that we are at $220 the easy money has been made. However I think there remains to be lots of price appreciation ahead. 1) Modine has had slight margin compression while investing in manufacturing capacity to capture market share (short term mini headwind, long term huge tailwind). We are yet to see the margin expansion (I envision this will be over the next 12-18 months that we will see the improvements on the P&L, assuming no structural issues) 2) Hyperscaler CAPEX forecasts for 2026 is huge, with most of this flowing into data centres. As data centre processing power scales exponentially, so does the heat given off which needs to be moved. Modine has specialised equipment, 1MW TurboChill, and a wide array of products ie dry coolers that they will inevitably expand their revenue backlog even as their production ramps up. My 18 month forecast is $350+, yours?

_hiddenscout

Apples to oranges comparison. It's not really fair to compare Amazon to NYT lol. No idea why they did that, but it's not a great idea to try to compare companies when they are in different sectors. Birkshire is one of those companies that manage so much money and FCF is important to them. This year Amazon is looking to go negative into FCF for the CAPEX. Same thing happened to Amazon during the pandemic. It was around like 2021 to 2023, the company spent a ton on like warehouse, trucks, more logistics. It's kind of what Amazon does and what is really unique compared to the rest of the Mag7, they invest heavily back into the company. I used to work for them, their motto is Day 1. It's actually the building Bezo worked out of, since that's the idea of the company, is never to move out day 1. But during that Capex heavy period, there was recession fears as well as rising interest rates, but Amazon basically was basically down like 50% during that capex cycle. One of the worst performers of the Mag7 during that time period., Could be they are moving away from the company the next year, since they are expecting investors to avoid for the time being.

Pseudonym7369

One solid analysis. You are ahead of me, i had the same idea, but great execution nevertheless. My 2 cents would be companies like $VRT are also super CAPEX dependent and as soon as they realize its not sustainable this one is gonna drop. It has ~70% revenue dependence i believe, if i remember it correctly.

El3k0n

META was sold heavily after it revealed its CAPEX plan for 2026, now it’s getting bought for actuating the same plan?

El3k0n

META shooting up on the news that NVIDIA will sell them millions of new chips. I guess CAPEX is not bad anymore (?)

KittyLover-7

Meta x NVDA multiyear deal Street watching CAPEX plans stretch years whilst they sell like pussies

Sick0h

Mag7 CEOs: CAPEX payoff gonna be huge 🤑 Market: No it won’t! 😡

Smart-Customer7503

MSFT reportedly using 95% of CAPEX to fix Satya's baldness.

BigWarning8696

Getting hit for CAPEX spending. From a historical valuation standpoint, it's fairly valued. If the market dumps, it'll go lower, but a long hold will be fine here.

winston511

Fuck your puts, fuck your calls, CAPEX got you by the balls

sailortyx56

Every other Mag7 is investing the entire GDP of Qatar in AI CAPEX And then there is Apple with no AI CAPEX, just chilling with no working Siri. lol.

Sick0h

Biggest problem is the market is basically demanding their biggest customers stop increasing CAPEX

tika_dengu

What is the CAPEX of a daycare center?

Haisaiman

Umm Meta DAU (really DAP) Hasn’t decline since like 2021. This is really a bunch of uninformed fear mongering. I mean I am saying doesn’t have serious concerns like CAPEX and ROI and FCF….. But this is going overboard in the tinfoil hat direction.

andytobbles

AI bubble fears have nothing to do it with it. It’s massive CAPEX spending fears, Wall Street is scratching their head if 600B is going to see a return on EPS in the short term. Rotation into value tells you they’re thinking no until proven otherwise.

zmannz1984

It is partly due to macro factors at the moment. Global liquidity is tightening and that leads to less investment into speculative growth trades. Despite being very profitable, all mag names have cut deeply into their fcf by going crazy on AI CAPEX spending for several quarters and they aren’t turning much profit on that yet. It will take a new liquidity cycle to make the current balance sheets investable again, or it will take seeing renewed profit cycles from all the spending. Msft faces another risk too: much of their current software revenue is at risk of becoming irrelevant due to AI itself. All these monthly subscriptions to office and the like rely on companies needing to furnish thousands of subscriptions to their employees for productivity. If those employees are replaced by AI that can do the work without the need for other software, and they no longer even need thousands of windows licenses, then they have to make that much more money off the ai spending to continue growing. That is a very big if right now.

_hiddenscout

It's funny because I post more in the daily's have brought this name up over the years. I still hold my shares for a few reasons. One is that I haven't seen anything bad in terms of the earnings of the company. Until the thesis breaks, there's really no reason to sell in my opinion. Like what Peter Lynch says: “Selling your winners and holding your losers is like cutting the flowers and watering the weeds.” I do think there is going to be a point where CAPEX cut does happen and I will take a hit on the shares, but I have no idea when that is happening. Again, I'm in a difference place than most investors since I've been long for a long longer and I don't mind if the stocks drops like 20% on CAPEX cut fears. Rather see the numbers before I over react. Like here's an example of something from 2 years ago: [https://www.reddit.com/r/stocks/comments/1axxc42/comment/krs7a71/?utm\_source=share&utm\_medium=web3x&utm\_name=web3xcss&utm\_term=1&utm\_content=share\_button](https://www.reddit.com/r/stocks/comments/1axxc42/comment/krs7a71/?utm_source=share&utm_medium=web3x&utm_name=web3xcss&utm_term=1&utm_content=share_button) Call out IESC, FIX, POWL, NVT, VRT, EME, and PWR. I lucked out since around 3-4 years ago I was buying electrification and physical data centers stocks before AI really took off.

_pout_

You're only down 5%? It's going to swing that much on a weekly basis with its CAPEX.

CraneEternal

Essentially everyone posting about PE, PEG ratio, revenue growth, debt to equity and so forth is correct but you need to maintain common sense on company to public guidance. Take GOOGs recent earnings report where they were perfect in aspects but even so we saw their stock price tank nearly immediately even with positive metrics. Why? Their massive CAPEX into AI infrastructure shocked investors. Could the room so to say be read in this situation, very hard to tell. Can Alphabet afford their investments, certainly but the public shock was an invisible force that left many holding the bag.

_rockthemike

Big earnings beat higher than expected. All the CAPEX is going somewhere right?

kplowlander

Don't matter. What tge market wants know is if CAPEX from big tech will be higher in 18 months so NVDA grows revenue.  No one can answer that, so stock goes side ways even with amazing product and earnings. 

Smart-Customer7503

MSFT just revealed that over 90% of their CAPEX is just trying to get Satya's hair back

cupcee

Whats up with Nvidia dumping with Mag7, I get the rest dumping on massive CAPEX but NVDA is the receivind end of this money

Amrit__Singh

That’s why I am and will be investing in companies that are beneficiaries of the 650B+ CAPEX spend while the hyperscalers stocks are stabilizing with low returns :) I don’t need to time to bottom for the hyperscalers. I will hop in when I see confidence in free cash flow increasing.  In the mean time, I will make my returns elsewhere.

Quiet_Ad_9073

CAPEX cut maybe XD

Ithinktoodeep55

huge rise in CAPEX spending usually temporarily compresses earnings, thats why I think the stocks are down IMO