CAPEX

SuperNewk

NVDA up 10% ah? once Meta and MSFT say they are increasing CAPEX

Vooshka

It's not just the tariffs, the constant policy flip-flopping makes planning impossible. When the tariffs were first announced, my customers were making huge plans and contacting all their suppliers to better understand where they could be savings. After 3 weeks, they have stopped and are now taking a wait-and-see approach. Moving a production facility takes huge amounts of CAPEX, and also requires a competent work force,logistics, support base, etc., which takes years/decades to plan and set up.

Consistent-Duck8062

For such massive incentives, their results are quite shit. Google didn't come up with new product in a decade, they just squeeze their ads. Where is all that CAPEX going into, I don't understand. Sales teams? It's certainly not in R&D.

No-Sleep-8444

I’m a CPA. These are cash flow statement amounts. The timing of cash inflows and outflows often varies. Nothing appears unusual to me. They spent less on property, plant, and equipment (balance sheet asset that is referred to as CAPEX on CF statements) in Q1 2025 vs Q1 2024. It’s very hard to draw a conclusion from only two quarters of cash flow data. They could simply be pushing CAPEX back to later in the year.

Deicide1031

Fords net profit margin was around 3% annualized in 2024 which is peanuts compared to Google who hit 28%. That said the bulk of fords profits will go into CAPEX and R&D for the next super huge F150, not employees or shareholders.

Old-Sparkles

Also, they expect this innovatiom soon and from a company whose Q1 CAPEX is half of what it was last year.

egowritingcheques

That increases PE to 138. And with Q2 also very likely to be a similar amount lower YoY the PE projection would be around 150. I'd also like to know if the much lower CAPEX for this quarter is sustainable.

TequilaTrader

If GOOGL was smart they’d report cutting their CAPEX budget by 20b.

Critical-Future-292

Any opinions on VGZ seems they’ve been talking forever about digging at Mt. Todd but with the spot price of gold I don’t understand why, if their results are as good as they say, they can’t meet the CAPEX to start mining. Even though this area has already been mined so all the infrastructure and regulatory requirements are already in place.

gatormanmm1

Correct me if I'm wrong, but my understanding of rare earth minerals was the constraint was on refinement not raw materials. These facilities take years of heavy CAPEX and expertise come online

Prethiraj

Honestly those two have the least uncertainty because TSM won't see their demand go down so neither will ASML. Big tech have already confirmed they are not going to cut CAPEX spending.

Backhandslap88

Committing to overpaying on AI CAPEX isn’t bullish lmao. 🫵🤡

johannschmidt

Not to mention the CAPEX to build brand-new facilities in the US.

gatormanmm1

...this pure chaos. CFOs are going to ramp down CAPEX and fire up layoffs, and bunker down until they can get consistent guidance. Taking away the any discussions on the merits tariffs, the 'roll out' has had makings of a last minute term paper. Absolute bush league operation

gounatos

This is bullish for $Tsla. Can now stop wasting CAPEX on car and manufacturing and focus on being a tech company. (/s)

Aravinda82

Those financial companies(funds, trading houses, etc…) in the inner circle can trade but actual real businesses, even those in the inner circle, can’t make long term CAPEX plans or investments in this environment and that’s more important for the economy.

xdr01

Makes Tesla 2025 CAPEX simpler, orders will be only Bitcoin.

reelcon

It is true for cheap labor manufacturing and IT jobs moved overseas, with robotic manufacturing and AI likely to improve both areas the labor market dynamics can change. The big Q is will companies spend huge CAPEX in US or let consumers pay tariffs and keep it where they are is to be seen. I think it will continue to stay as is, since companies are not taking the brunt on increased cost until consumption goes down drastically affecting their bottom line and profits.

Silent-Strain6964

Not only that. At last check, many companies fuckin hate CAPEX. Building manufacturing with tons of automation to keep costs down is CAPEX. Look at NVIDIA and how much CAPEX they have. Look at why people go to the cloud even though it costs wayyy freaking more than running it yourself. Companies in the US strongly want OPEX to chop things off whenever they need or want. As well it makes them look sexier to sell and the shareholder value looks awesome.

defnotIW42

Right? Like, duh you already reserved CAPEX for a Plant but now it might only be 10%. 10%, you just go to mexico again.

karmacretin

Ah so all the CFOs see this move and say "Full steam ahead on our CAPEX spending for 2025" given the certainty of a tweet

In-Evidable

Refining rock slurry is highly abrasive. Sensors and equipment fail regularly. There is automation, but it’s not at the level you’d see elsewhere. Part of it is because you can’t entirely trust a computer readout for the process. Also mines have a “mine life” that is factored into CAPEX decisions. Also, mining isn’t always the most lucrative, with a product selling price that is highly variable. So there’s more automation going on than you may think, but there’s definitely a limit to what you can do.

crimepais

We haven't actually even seen the inflation and CAPEX slowdowns yet. Need to wait for Q2 / Q3 figures to come out.

ChimayoRed9035

Nah. This is the analysis you get when you just can’t be objective. Imagine you’re a CEO and your options are to raise prices and pay tariffs for four years or plan massive CAPEX projects that will cost billions, lower margins and take 10 years to complete. Prices aren’t going to magically fall if companies are shelling out massive CAPEX. So short term is really like 5-10 years assuming tariffs are consistent. We already have plenty of history to understand how reluctant company’s are to major CAPEX project or else we wouldn’t see the rise in stock buy backs.

Acavia8

I do not see what it matters. If he dropped him, yeah the market my have a short term bounce recovering maybe half of what it lost last week, but businesses ae going to start cutting CAPEX and announcing layoffs because uncertainty = risk and uncertainty is sky high. A recession alone means 20% cut to corporate earnings, and the compression of PE multiples, so even if everything became normal - that will not happen, the market needs to go down further to equate a fair value, and if you consider it usually overswings, then even further than that.

MaxDragonMan

Honestly I simply think they don't get due recognition for how well they're doing. They've been digesting the Xilinx acquisition for a long time and have been doing generally quite well, but Nvidia has taken the absolute lion's share of server CAPEX spend and AMD simply can't compete. Their offerings are just straight-up not as good in that space. Additionally, Nvidia's CUDA architecture and other software ecosystem is miles ahead of AMD. However, at the time I made the investment I bought equal quantities of both because I saw both as essential for the future. That's not to say they don't make money, or don't make more now than they did in 2021, but I don't believe their share price has been properly rewarded for growth. Instead, you've seen the P/E decline, and if anything become more attractive. For the long term I think AMD has been a "mixed" hold: in March 2023 it was up *a lot*, and I have been mostly happy having it in my portfolio. However, the drop has been precipitous and I haven't seen that much evidence that AMD is going to change their approach in a way that will net them a greater portion of the market.

StrangeAd4944

The market is moving to PE of 15 or lower in line with EMEA. All Multinationals are fucked. Their supply chains are fucked and can’t be unfucked. CAPEX is dead without clear law that can’t be undone by a stroke of a pen. Growth is a dream of the past. The promise of FANGS is fucked beyond all recognition. They are nothing but a Walmart of adds now.

mpmoore69

So a company would need to do the following to avoid tariffs, at least according to Trump logic. 1. Move manufacturing back to the USA. So now we got an increase in CAPEX in addition to future increases in labor costs for that iPhone or pair of shoes. 2. American consumers will want to support home goods and will spend the extra $$$ they don't have on luxury goods they do require to live. Its a pipe dream but when you don't care about the grubs.... Honestly, i can see this lasting maybe a few weeks/months before the market forces his hand. Lots of damage would be done but this wont continue for 3 more years until a real leader steps up.

joskosugar

It's because you're comparing it to November. Bubbling started before that. You need P/E ratio catch up, by earnings growth or capitalisation shrink. Since AI CAPEX doesn't seem to pay off, we're up for the latter. Mag 7 should drop 30% on average at least.

95Daphne

As an fyi, META was more likely around a 12 PE when it bottomed. If this is #4 on bears for the Nasdaq in 8 years, Google to $120-130 is very on the table, then CAPEX cuts and a Sundar firing also is.

95Daphne

Probably a really good chance Google sees $120-130 and Microsoft at least $300, now if whether it’s in May or later is another question. By summer earnings, you probably start hearing about CAPEX cuts. There’s a good chance Big Tech bottoms before semis.

CraftyProgrammer

“$1B? What is this, CAPEX for ants?!”

capobvime

EMM.V, over $1M invested, now patiently waiting. Got their mining license along with 5y special economical zone tax reduction, NPV over 1B and will improve significantly when drill remaining properties, CAPEX only $280M. Few weeks away from sending high purity MSM to offtakers (OEMs and battery producers), updated DFS later this year with offtake contracts, financing to follow.

bearclawc

Doesn’t matter what the big leading ai player is. I don’t see how that context applies to what musk is doing. Should that stop him from buying X or merging xAI with X? If the love of one company is what you feel drives innovation or bigger CAPEX as you put it, the world will have singular companies. There will just be coke, and probably just be PlayStation or Nintendo switch. I don’t really know what you are trying to say. xAI will grow, will it be better than OpenAI? who knows but that won’t stop it from growing.

violt

what if i told you that there is another leading AI player that has dominating search engine, dominating video platform and leading email service for content taping. They also have biggest user-base and user-reach in the world and CAPEX plan to spend more on AI for 2025 than entire xAI valuation. That stock dropped 23% in last month. So yeah... makes perfect sense and investors are loving it.

Consistent-Duck8062

Does Wiz even have value of 30B, or is google CEO just too trigger happy on pointless CAPEX?

CEOofBeanz

I should join a random private equity meeting and start talking financial gibberish: Yeah, so we’re looking at stringing out CAPEX 5-7 years down the line until our roll ups reach peak multiple. Then we can start focusing on divesting the lower end of the balance sheet to create some room for our short-term deliverable That’s going to help us leverage and also patch up working capital concerns as they arise as we scale

Consistent-Duck8062

Yeah, they gave away LLMs to openAI. What a great financial decision. Spend billions on CAPEX to develop LLMs, give it to other companies. Is google a charity? Yeah, they did quantum computing. I wonder who'll they give it for free now, nvidia, amd or chinese? It sure as hell won't be google stockholder profiting on it ...

AbsorbingTax

News came out today that the big boys aren't really cutting CAPEX for Ai. Make of it what you will.

MaxDragonMan

Let's hope not. I know semis are cyclical but so far CAPEX spend is still happening. I obviously can't control it but it would be nice if Nvidia plateaus here and then their earnings catch up to their valuation a bit. But there's the broader market to consider too, so.

Yield_On_Cost

CAPEX is formed from two parts, maintenance CAPEX and growth CAPEX. Check the difference.

Yield_On_Cost

Last quarter: CFO - $433M CAPEX - $11 SBC - $428M \----------------------- FCF - SBC = -$6M Of course they are doing buybacks, they are juggling with expenses, instead of paying employees cash they go the SBC route and they continue to dilute shareholders. This positive FCF you are seeing is just is the equivalent of selling shares open market to raise cash. You can see that, despite their buybacks the shares outstanding keep increasing

Consistent-Duck8062

Google CEO hates his shareholders, as simple as that. Wasting money on CAPEX left and right, with no tangible results, let alone new products. CEO needs to go.

BrobaFett_1

Been looking out for insider buying on some of the CAPEX names. Not seeing any in the others I own so far, but STRL's CEO bought some this week ([link](http://openinsider.com/screener?s=STRL&o=&pl=&ph=&ll=&lh=&fd=730&fdr=&td=0&tdr=&fdlyl=&fdlyh=&daysago=&xp=1&xs=1&vl=&vh=&ocl=&och=&sic1=-1&sicl=100&sich=9999&grp=0&nfl=&nfh=&nil=&nih=&nol=&noh=&v2l=&v2h=&oc2l=&oc2h=&sortcol=0&cnt=100&page=1)). cc: u/_hiddenscout. Not sure who else owns.

sirporter

Their financial statement they submit to the SEC, should be posted on multiple sites. Redid my calculate just looking at the last quarter and multiplying it by 4 to represent the whole year. 1.3 B cash from operations - 340 m in Stock Comp - 200 m in CAPEX = 760 m net income for the last quarter. 760 m x 4 (for full year) = 3.04 B in net income / 1.6 B shares outstanding = 1.9 EPS 100 share price / 1.9 EPS = 50 PE.

Curious_me_too

The CHIPS Act has largely achieved its initial goal—kickstarting semiconductor manufacturing in the U.S. Fabrication (fab) companies have begun their buildout, and with significant investments already made, it’s unlikely they will abandon their projects. When a company considers relocating production, it evaluates two key cost factors: 1. **Capital Expenditure (CAPEX)** – The upfront cost of building a factory or fab. 2. **Per-Unit Production Cost** – The ongoing cost of manufacturing each chip and how it compares to other global production centers. The CHIPS Act primarily addressed the first factor by providing funding for infrastructure development. However, it assumed that economies of scale would naturally resolve the second issue—an assumption that doesn’t hold up. To make U.S. semiconductor manufacturing globally competitive, several strategies can be explored: 1. **Economies of Scale** – Producing in larger quantities can reduce costs, but this is difficult as Taiwan already has greater scale and lower costs. 2. **Lower Workforce Costs** – A larger labor pool allows for competitive wages, but the U.S. currently lacks a sufficiently skilled workforce in this sector. 3. **Tariffs** – Imposing tariffs to protect domestic production is ineffective because it raises costs for U.S.-made chips. This, in turn, increases the price of end products, hurting exports and disrupting supply chains. 4. **Reducing Input Costs** – Subsidizing key resources like raw materials, water, and electricity can make domestic production more cost-effective. A practical solution would focus on **workforce development (Option 2) and reducing input costs (Option 4):** • **Lower Energy and Resource Costs** – Subsidizing electricity and water usage can provide a strategic advantage, especially since Taiwan faces water shortages. Additionally, offering land at lower costs for fab expansion can help. • **Expanding the Skilled Workforce** – The U.S. needs more hardware and electronics engineers. Universities should be incentivized to increase the number of graduates in these fields. Additionally, housing development near fabs will be essential to accommodate the growing labor force.

greenpride32

The reason why NVDA is flourishing and AMD is not in the AI hypergrowth stages is because NVDA created the platform where AI has more or less been developed for the past 10+ years. It's not simply about having any GPU's and compute power, but an overall integrated solution. That platform is known as CUDA. Code is written to leverage CUDA platform which in turn optimizes the both development and the acutal processing. The space where AMD is winning, is the CPU space. It is taking market share away from INTC. But CPU is more or less a commodity and PC sales are more or less flat for near 15 years. Just look at INTC stock performance. They still sell billions and pay out billions a year in dividends (or at least used to). But the stock doesn't really move because there is no growth. AMD's growth was taking market share from INTC - not from NVDA. But there is only so much room to grow in the CPU space. I keep seeing AMD bull cases with the line of thought that NVDA GPU demand outweights supply, and AMD can come swooping in to fill the gap. But that has not happend primarily because of CUDA. When AMD can show some signs of breaking into the AI GPU market, I am 100% a buyer of the stock. Now what is going to compel teams to switch to AMD GPU? It's a tough sell right now because AI is currently a big race. The market potential is huge and everyone wants to be first mover. There is no time to stop and reset. The reason why big tech has $70-100b CAPEX spend this year alone is to move with speed. The speed/race component is just an unfortuante circumstance for AMD. Had they been more aggressive in the space 5-6 years ago they would be better positioned - this emphasizes previous point I made about importance of being first mover.

BrobaFett_1

Very fair to be scared of the current markets. I was hit hard by the AI bubble deflation since I was pretty heavily invested in electrification and CAPEX names. Luckily I pulled my entire 401k out prior to the recent dip as a reaction to that earlier deflation. I'm not currently invested in any of those any more, but I'm keeping an eye on them. I haven't read much on inflatable habitats. Thanks I'll look into it! You definitely have a lot of interesting space information! Regarding the 5G LEOs, are you in (or following) ASTS then? Despite knowing about the product for a while and being really optimistic about it since I do a lot of backpacking...I failed to invest until it ran quite a lot. But I got in on recent pullback. They're the furthest along at this point, right?

MaxDragonMan

Not buying yet but I'm waiting to see where BN ends up. MSFT and AMZN also look like they're at decent prices, but I already own some and am waiting to see what happens in regards to CAPEX next quarter.

greenpride32

It's a new frontier so really hard to say. There are other companies similar to CoreWeave. Perhaps best known is Lambda. For the most part I would say these smaller players are trying to under cut AMZN AWS and MSFT Azure pricing. First mover advantage is always huge. If you are first and you can execute, you have a good chance at success. Look at TikTok. The social media giants of Meta and Google could not take them on. ChatGPT is still dominating LLM headlines, but it's certainly not the only LLM out there. Big AI race, you have the GOOGL/META/MSFT/AMZN spending $70-100b CAPEX this year alone - a lot is at stake. Only crystal clear winner thus far is NVDA. My money is on MSFT and AMZN being the key AI hyperscalers of the future. But I will dabble in CoreWeave if the valuation is reasonable (it likely won't be).

Famous-Ask1004

It’s a bubble because mass rollouts and value haven’t been generated to a degree to justify the cost of building this all up. We can’t power it yet on a large scale (Microsoft bought a fucking nuclear reactor for it) and that takes time. Additionally, it still hasn’t created a use case for the majority of society where it makes up for the insane CAPEX to get the ball moving on it all.

Brazilian-options

I mean the stock just went down 20% from it’s ath because of their surprinsingly high CAPEX. I sure hope they are not just burning 70 billion dollars lol I’m confident all this spending is towards these solutions and Cloud service.

BrobaFett_1

Do you have concerns with the recent drop in EME and related datacenter construction names? It seems like the market is expecting AI CAPEX reductions going forward with how hard these names have fallen in the last few weeks.

Quant_Observer

No ROI on the massive CAPEX from the Mag 7, their stocks get punished, they reduce data center buildouts, Nvidia crashes the first quarter of declining revenue. There’s an incredibly high bar for these companies to get a return on what’s a $300 billion buildout. It’ll need to generate like $1T in incremental revenues in the next 5-10 years to justify

Triple-Ark-Solutions

I really hope everyone in this sub continues to buy this $3.2T generating at best $160B in revenue per year, every single year. I never understood the concept of why a company NEEDS to go to $7T when the pool of spending from the MAG7 doesn't justify 1 single company generating majority of all the chip sales. Why does everyone think that the MAG7 will continue to buy brand new chips from NVDA every single year? Are we expecting a new MAG7 per year to keep pace of CAPEX spending? If everyone is saying that buying new chips every single year like buying the new iPhone every single year and companies can justify dropping $10s of billions every year then show me the homework because the MAG7 dominate the annual spending of all the other smaller companies combined. Anyways, good luck everyone but even if NVDA goes to $7T, you are investing in a stock that will 2X and not sure if that is the best play for investing all your eggs.

knowitallz

Yes and I know Microsoft is going to slow way down on their CAPEX on AI. They just kind of said AI is not a value add. So Imagine others will follow suit once they realize the race will not be won. There are many races, and they take time. Spending tons of money without any benefit is a waste. It's going to happen this year 2025. The spending slow down.

Nemo-pluribus-unum

Pichai really hoping for that golden parachute. In the next call he will announce even higher costs and CAPEX until he will be removed. Lol

DrewNY94

No matter what CEO says, MSFT might be the single most defensive stock there is out there today. It's FCF is one of the best in the world and it's AAA bonds are actually rated safer than US Treasuries. Not to mention they could literally turn off their CAPEX spigot a moment's notice if there was some kind of economic down-turn. If you want to be defensive while staying in equities hold MSFT.

Wanderer1187

Maybe cheaper OPEX, but the final project CAPEX of American companies will be significantly higher

Wanderer1187

I believe this is one of the most asymmetric risk/reward opportunities in the market. Various reasons on top of yours are below: 1. They are now officially going with the phased approach to hit that 36k ton LCE at a rate of 12k tons per phase (no longer LHM but with optional add-on to factory later) which dramatically lowers overall CAPEX to hit production which obviously makes this a more bankable project. This also lowers the OPEX costs. So the FCF numbers and IRR numbers will improve (despite naturally being impacted by inflation on CAPEX costs). 1a) I believe that they truly want to be a battery company. Their partnership with Pure Lithium to build a brine-to-battery demo plant and Pure Lithium step change in technology is truly the "knock the ball out of the park" play here that I truly want, but E3 is still is still a great buy without this. And Ivanhoe's Robert Friedland is one of Pure Lithium's major backers. He would have been aware of and have been consulted on Pure Lithium's decision to partner with E3 which I take as tacit approval of E3. 2. Chris (CEO) is actively working with the Canadian government and has 2 former Provincial Premiers as advisors. He's mentioned that he's in the group to help policymakers craft legislation to cover 30% of their project's (and others obviously) development costs so that the bank can finance the rest. You cannot underestimate the need of a country to fund technological innovation. All countries outside of the US have national winners, and in the face of all of this China competition, newly hostile US environment, etc., the Canadian government needs to build their own economy and being at the competitive forefront of lithium production for the world basically is a massive requirement. 3. Their resource is under-measured. Legally accepted resource estimation methods don't allow for the full capture of E3's resource availability. They even wrote a paper on it. 4. You should probably assume actual fully diluted shares to be closer to 100M (at 87M now), but I believe that just proves the worst case dilution and project financing numbers work out well for E3 to still knock it out of the park. My guess is that they will have 30% of their project development costs covered by the Canadian government with very low interest rate loans at the worst case, a bank to cover maybe 50%, and an offtake partner (like Honda probably) funding the final 20%. They will hit first Lithium delivery in late 2027 or early 2028 at a price per ton minimum of $13,000 to deliver 9k tons (3/4 of stated) in the first year at an OPEX cost of $6000. to produce a net profit after tax and debt service of \~$30M annually. Then, numbers will continue to improve, they'll announce a partnership with Pure Lithium, and build out capacity every 2 years to hit the 36k tons as Lithium demand continues to increase to $20k per ton while OPEX increases to $7500/yr. Hitting 33k tons (think of maintenance issues) in 2032 at a net income after tax of roughly $380M. At a 4x P/E multiple you're looking at a conservative price I believe of $1.5B which I think is very conservative. So at the current call it $45M MC is a 33.33x in 7 years. Seems like a good move to me

ttokid0ki

fud tends to come before earnings. there was black well production issue fud, then overheating issues, demand questions from deepseek, now demand questions from AI orders... the FUD comes from firms from the likes of TD cohen, which also created rumors regarding blackwell demand which was then proven to be fud. mega cap earnings showed CAPEX spend. And no one, NO ONE is even close to providing the inference/training efficiency of nvda's GPUs. ASICs can hit inference targets for specific models, but model structure is evolving much faster than ASICs can keep up with.

No-Donut-3847

Alphabet and other tech stocks surprised with their increased AI CAPEX. Why should outlook for NVDA be bad?

ActuallyMy

Intentional FUD lmao. Microsoft, Google, Amazon and Facebook all announce record CAPEX spending for 2025 not even a month ago.

Euphoric-Magazine300

MSFT came out and said they're reducing CAPEX into data centers. Whole AI bubble could pop. https://x.com/samsolid57/status/1893746558794912244?s=19

Quant_Observer

I think resting on this notion that paradigms don't shift, ignoring valuations, being clear-eyed about the risks ahead and where upside value lies in markets is a strength. Inflation will return...there isn't a single policy that would convince me otherwise. The Mag 7 are spending hundreds of billions on a high-risk bet on AI right now -- yes, AI will continue to change the economy but will the ROIC match that massive amount of CAPEX? It hasn't thus far. And, as all things go, companies will find ways to do it cheaper, faster, with better algorithms. BYD in China is the largest manufacturer of EVs on the planet, and is absolutely smoking Tesla in China. BYD is going global -- not in the U.S. -- but that company is growing. It's basically the Toyota of EVs. China is coming out of a recession, a good time to purchase equities. It's government is working on loosening its extreme stance on tech, corporations. It's clearly signaled an openness to new deals globally. China has every single motivation to keep exports high to keep its economy driving, and it will find markets outside of the U.S. to do it. U.S. investors are complacent and ignore some good value outside the country. It's not emotion to understand how isolationist policies work in favor of China, which in turn works in favor of the EU and Latin America. This isn't emotion -- sure, I may throw some hyperbole out there in a Reddit comment thread -- but it's not as if it's without a thesis and looking at what the situation could be in the next 2 to 3 years. Again, I own plenty of U.S. stocks. It's not like I've abandoned U.S. equities -- that would be dumb. But the Mag 7 are now like 30% of global stock valuations, and paradigms change. ROW outperformed the U.S. following the [dot.com](http://dot.com) bust and the Great Financial Crisis -- and I'm not saying U.S. markets are in for a depression, but a 30% decline and recession looks reasonable. I'm simply hedging my portfolio, and there's decent upside outside the U.S., whereas -- on the spectrum -- there's a lot more downside risk in the U.S. at current valuations. And should markets decline, I'll reallocate to my U.S. stocks and deploy cash when panic hits, or when the VIX exceeds 30 (historically a great time to put money to work).

furrypurpledinosaur

NVDA crashing would mean big tech doesn't need to spend hundreds of billions in CAPEX on AI bubble. That might actually be positive lol. MSFT already getting ahead of the situation and slashing CAPEX, getting out of contracts etc

EliteFortnite

Be *fearful* when others are *greedy* and to *be greedy* only when others are *fearful*. CAPEX is not only for AI chips but total infrastructure. If NVDA gives poor guidance which alot of the share price is based on then your going to see a huge drop.

BrobaFett_1

Looking through CTLP some more, I'm going to invest! I even checked out their career page for engineering opportunities haha - nothing near or available though. \+1 on holding the electrical names long-term. I am worried about a reduction in CAPEX spending in future quarters, but not seeing much news indicating that except for the stock prices staying depressed. I was just considering a position in ITRI actually! I believe you mentioned it more than half a year ago? It's been on my watchlist for a while since I heard the name. I sold my position in CARR and GWW to diversify, so I might reallocate some there. Thanks for the new names to follow - AYI / CRS / ATI. I've been interested in HWN forever, but I just keep watching it go up haha. Did you recently open a position? I got WWD after the August drop. It's dated, but I also found this SRAD analysis from 2021. Thought it was interesting comparing it to now: [https://www.reddit.com/r/stocks/comments/rkib3w/the\_case\_for\_srad\_to\_hit\_100\_in\_4\_years/](https://www.reddit.com/r/stocks/comments/rkib3w/the_case_for_srad_to_hit_100_in_4_years/)

racks_long

|Time|Cur.|Event|Imp.|Actual|Forecast|Previous| |:-|:-|:-|:-|:-|:-|:-| |Thursday 20 February 2025 | |13:30|USD|[Continuing Jobless Claims](https://uk.investing.com/economic-calendar/continuing-jobless-claims-522)||1,869.00K|1,870.00K|1,845.00K| |13:30|USD|[Initial Jobless Claims](https://uk.investing.com/economic-calendar/initial-jobless-claims-294)||219.00K|215.00K|214.00K| |13:30|USD|[Jobless Claims 4-Week Avg.](https://uk.investing.com/economic-calendar/jobless-claims-4-week-avg.-1041)||215.25K||216.25K| |13:30|USD|[Philadelphia Fed Manufacturing Index (Feb)](https://uk.investing.com/economic-calendar/philadelphia-fed-manufacturing-index-236)||18.10|19.40|44.30| |13:30|USD|[Philly Fed Business Conditions (Feb)](https://uk.investing.com/economic-calendar/philly-fed-business-conditions-907)||27.80||46.30| |13:30|USD|[Philly Fed CAPEX Index (Feb)](https://uk.investing.com/economic-calendar/philly-fed-capex-index-1501)||14.00||39.00| |13:30|USD|[Philly Fed Employment (Feb)](https://uk.investing.com/economic-calendar/philly-fed-employment-908)||5.30||11.90|

Horror_Difference_75

SMCI is around the same market cap as RDDT. Meanwhile, SMCI is getting all the AI CAPEX Infrastructure contracts from megacaps.... Seems like a steal to me

2dP_rdg

just FYI the CEO has openly stated they are trying to sell the company for parts. The board intentionally replaced the last CEO because when he laid out the plan for saving the company they didn't like the CAPEX gamble and dumped him so they could part out of the company. 

Cut_Copies

I appreciate that you’re coming at this with at least a real bull case, but the overwhelming odds are that this current CAPEX trend from big tech will be disrupted, putting side a multitude of other risks to NVDA staying the top dog

Thefellowang

1. All the LLM vendors are trying to enter the search market 2. LLM market will likely go through a price war due to Deepseek, which will erode Google's margins 3. Huge CAPEX will start impacting margins soon. AI agent is far-fetched. However, Google is still a strong tech company. It's just that I start wondering when its huge investments start to pay off.

ReincarnatedFatass

Seems like you’ve convinced yourself that. Market is at an ATH, all those concerns are priced in. Even China’s deepseek report didn’t really tank the Mag 7 / chip industry at earnings as much as it was intending to. Sure we’re in a bubble, but it will take years for this one to pop, wait for the first few years of the datacenter CAPEX returns, until then, stay on the sidelines. The market can stay irrational longer than you can stay solvent.

Character_Economy928

NVDA’s P/E, P/S, and EV/EBITDA are pretty stretched thanks to the AI buzz. If cloud companies (CSP) cut back on CAPEX and GM% softens, growth could ease off. With an overbought RSI and macro pressures like CPI,, and QT, a pullback toward its SMA wouldn’t be shocking—plus, CUDA still gives it a solid moat.

Singularity-42

Every Mag7 that had ER had massive CAPEX spending. A bit more reliable info than "MEGAsizeGPU" Chinese Twitter poster I think.

NYCandrun

BlackBerry’s EBITDA made a turnaround in FY2024, improving from a -$71M loss in FY2023 to $57M, driven by aggressive cost-cutting and a one-time $218M patent sale. With CAPEX at just $7M annually and interest expenses around $6M per year, EBITDA is now more than enough to cover both without straining cash flow. Free cash flow also saw major improvement, shifting from a -$270M deficit in FY2023 (which included a $165M legal settlement) to just -$10M in FY2024, and even turning positive ($3M) by Q3 FY2025—the first positive FCF in about three years. As long as cost reductions hold and operations remain stable, BlackBerry’s EBITDA should continue covering its capital spending and financing costs without needing external funding.

Thundersharting

You talk about a high margin business on the one hand and trading multiples of revenue on the other. Multiples of revenue as a benchmark metric is grade A bullshit and if people talk about it it's a surefire sign of a frothy overbought market. What is their EBITDA trend and is it enough to cover their CAPEX and financing costs. That's what matters not their revenue trading multiple for gods sake.

Both-Shelter952

Doesn't make sense to me either for prices to drop. Companies are doing extreme levels of due diligence before they disclose to the public about projected future CAPEX spend. Sure it might be long term - but it gives a reassuring runway of where future dollars are being (hopefully) well spent. Now is Mag7 overpriced? Yeah haha. Good luck. Also tough to understand how DeepSeek's reduced computational requirements (aka lower CAPEX) might have ripple effects into these cloud stocks.

Quant_Observer

After the dot.com bust international outperformed the US handily for nearly a decade. There are short cycles, medium cycles and long cycles. I’m not all in on one predication or another, but other savvy hedge funds are loading up on international/emerging right now. Simply put, sentiment couldn’t be lower outside the US, and but domestically sentiment is hot and presents far more downside risk…particularly given massive concentration in 7 stocks that are embarking on $200B combined AI CAPEX bet with a high uncertainty the ROI will justify it.

Quant_Observer

Whatever you want to say -- my emotions are making me money. Tell me how diminishing tax revenues, WHILE raising the debt ceiling $4.5 trillion leads to STRONGER Treasury auctions? Yield are going to rise, and that pressures stocks as people with $25 million investable assets have 0 problem collecting 5-7% yields. That impacts the stock market as money is pulled out. Tariffs, incoherent foreign and domestic policy FREEZES CAPEX (it did in 2017 too). Leads to inventory frontloading, leaving companies on the hook. Tariffs lead to layoffs as companies horde cash and inventory and reduce labor. The auto sector employees hundreds of thousands of people in auto companies and the intricate, deep supply chains of distributors, repair shops, parts makers, die cutter etc. The signs are all there, and clearly Buffett's trades reflect that. It's not an abandonment of the U.S., it's a pragmatic analysis of the dicey situation we are in. Your jingoism and false believe of what this country was is based on some rosy past of what it used to be. Going forward, America is a great nation, but its global leadership has been, and will be, greatly diminished. Call me emotional, but I'm not blinded by some juvenile worship of what this country is.

zapszg

OPTT I think is not viable, as such a unit costs around 3m in CAPEX, makes around 8kWh/day which is worth around $1.30/day - return on investment, not in this lifetime. Only for very limited applications where nothing else is available for power generation.

zapszg

OPTT I think is not viable, as such a unit costs around 3m in CAPEX, makes around 8kWh/day which is worth around $1.30/day - return on investment, not in this lifetime. Only for very limited applications where nothing else is available for power generation.

Quant_Observer

Accurate? Interest rate spreads for banks are at cyclical highs and that always reverts, but banks are priced at high valuations. You never buy cyclicals at the top of a cycle when they are priced as if peak conditions will continue indefinitely. The rest of the world will forge trade alliances outside the US to combat a madman with wild tariff policies. Our own Treasury secretary says we’ll use currency manipulation to tip the scales. We are not reliable to our allies anymore and they will hedge that risk in the years ahead, which means benefits for the rest of the world. Our markets are in for an inflationary shock, not to mention 10-year yields rising to like 5-7%. When Treasury yields are that high, money pours out of stocks — especially at these valuations. Mag 7 embarking on a MASSIVE AI CAPEX spree when China is showing the same can be done for cheaper. Markets are definitely wary of how this spend will pan out, because the ROI needed to justify so much CAPEX is a HIGH bar now, and returns need to come in this year or the thesis is going to have holes.

KrustyClown_

Their investor relations department needs to work harder. Either set realistic guidance or understand better what investors want to see. I don’t buy into CAPEX is too high stories for a company of 30%+ net margin at ~$250bln revenue

Quant_Observer

The tariffs don’t mean a lot? lol. When he launched his trade war in his first term manufacturing CAPEX plummeted, and we needed to bail out the ag sector with $28 billion. lol. This version of tariffs aren’t targeted, they’re the rantings of a mad man and the repercussions will be vast and felt at home.

ddr2sodimm

The math on robotaxi is actually underwhelming. Ok revenues. Tight margins. Huge volume/CAPEX barriers to start replacing personal cars. But the math on Robotrucking and Last Mile/Courier is much better. Bullish

ddr2sodimm

The math on robotaxi is actually underwhelming. Ok revenues. Tight margins. Huge volume/CAPEX barriers to start recording personal cars. But the math on Robotrucking and Last Mile/Courier is much better. Bullish

hervalfreire

They’re still at it - if u read the earning reports, all the AI budget is in RL (Reality Labs). They’re still selling tens of millions of headsets and are still developing the next gen (eg Orion). In fact, they’re spending much more in CAPEX alone now vs 2019 (they just announced 65bn investment in more ML hardware - they announced a tiny fraction of that in 2021 and everyone went crazy) People didn’t understand shit, scammers made it even worse with NFTs, Meta stock took a nosedive for no reason at all, then everyone sort of assumed anything changed.

Sweaty_Platypus69

If SMCI post great earnings + guidance.. Watch for NVDA to soar again - probably this time to $135 - $138. I swear those Mag 7 tech earnings are basically mini NVDA earnings as well - at least for the cloud business CAPEX portion.

Quant_Observer

Beginning? lol. Tech has been in an era for 20 years in the market. Pepsi is highly, highly profitable but all companies go through slumps. Tech valuations are obscene and the thesis on massive CAPEX for AI infrastructure is eroding. All these companies spending hundreds of billions are about to get fucked when AI is cheaper, and upstart companies that can do all the things the Mag 7 can but for a fraction of the cost emerge. It wasn’t people who built the Internet infrastructure that made the most money, it was the companies that built on top of their spend that did

InStride

I get the purpose of this service…but are there really *that* many customers out there? I’m not touching this space. CAPEX heavy, direct competitors, giant legacy industry that still meets most customer needs…where is the defendable value??

cyril1991

I will add there’s also data center CAPEX before we even consider the fraction GPU represent….

sb4906

Since when buying software is CAPEX?

NotAriGold

They literally said the demand is greater than their supply right now, hence the CAPEX. Easy buy.

Requirement-Lazy

CAPEX of $75 billion is negative because it signals they have no idea what they’re doing and they’re just throwing money at AI. CAPEX itself is not a problem but it becomes one when you spend big to try and correct past failures

Unique_Name_2

I think CAPEX spent to replace their monopolistic search engine with AI that hallucinates is wasted capex. Otherwise a good hold.

Quant_Observer

Because they are taking a massive gamble dropping $100 billion on AI infrastructure they may not be needed in 5 years…markets starting to get worried about massive spend and low ROI on all this CAPEX For an example of the risk see what happened to Meta the year it went “all in” on the metaverse. Now, AI is a different beast — far more utility. Still, the spend is much higher and the risk the investment doesn’t pay off is real. Deep Seek was a hint at what may come — cheaper AI, better algos, less cost.

Objective_Pie8980

You act like CAPEX is a negative for long term... If you think that Google knows what they're doing then it's a strong long term reason to hold. Short term, CAPEX is going to limit the price.

Maffioze

I just continue to DCA. It's the only big tech company that isn't overvalued. I don't think this CAPEX spend on AI is going to last forever. Once the CAPEX drops free cashflow is going to explode massively and so will the stock