Author argues hyperscaler AI capex is unsustainable and cheap Chinese models erode moats, while memory/storage suppliers gain pricing power.
GOOGL — AVOID Author argues Alphabet is among the hyperscalers whose massive AI capex is spooking investors, especially as a cheaper Chinese model (GLM 5.2) shows models have no moat. He expects a breaking point this year when spending slows, and warns investors may sell these stocks down enough to force capex cuts even if leadership wants to continue. Directionally bearish/avoid GOOGL on this capex-discipline catalyst. No explicit risk is stated.
And by that point it may not be voluntary, as investors would have sold these stocks down enough where they are forced to cut capex even if the leadership still wants to do their all in bet on AI.
AMZN — AVOID Author argues Amazon is among the hyperscalers whose aggressive AI capex is spooking investors, compounded by a cheaper Chinese model (GLM 5.2) that shows model performance has no moat. He expects a breaking point this year when one hyperscaler slows spending, and warns investors may sell these stocks down enough to force capex cuts. Directionally bearish/avoid AMZN on this capex-discipline catalyst. No explicit risk is stated.
And by that point it may not be voluntary, as investors would have sold these stocks down enough where they are forced to cut capex even if the leadership still wants to do their all in bet on AI.
MSFT — AVOID Author argues Microsoft is among the hyperscalers whose heavy AI capex is spooking investors, especially after a cheaper Chinese model (GLM 5.2) showed competitive performance at a fraction of the cost. He expects a breaking point this year when spending slows, and warns investors may sell these stocks down enough to force capex cuts. Directionally bearish/avoid MSFT on this capex-discipline catalyst. No explicit risk is stated.
And by that point it may not be voluntary, as investors would have sold these stocks down enough where they are forced to cut capex even if the leadership still wants to do their all in bet on AI.
META — AVOID Author argues Meta is among the hyperscalers whose aggressive AI capex is spooking investors, and a cheap Chinese model (GLM 5.2) undermines the idea that models have a moat. He expects a breaking point this year when spending slows, and warns investors may sell these stocks down enough to force capex cuts. Directionally bearish/avoid META on this capex-discipline catalyst. No explicit risk is stated.
And by that point it may not be voluntary, as investors would have sold these stocks down enough where they are forced to cut capex even if the leadership still wants to do their all in bet on AI.
SNDK — LONG Author argues memory and storage suppliers like Sandisk have pricing power because big tech is willing to spend any amount on AI, so they can name their price and contract terms. He expects SNDK to continue climbing as hyperscaler spending persists. Long bias. No explicit risk is stated.
Which is why memory and storage stocks like sandisk and micron continue to climb up. They can basically name their price, the terms of the contract and these companies are more than happy to sign away.
MU — LONG Author argues memory and storage suppliers like Micron have pricing power because big tech is willing to spend any amount on AI, so they can name their price and contract terms. He expects MU to continue climbing as hyperscaler spending persists. Long bias. No explicit risk is stated.
Which is why memory and storage stocks like sandisk and micron continue to climb up. They can basically name their price, the terms of the contract and these companies are more than happy to sign away.