I see a buying opportunity in big tech names that have been hammered because of outsized 2026 capex forecasts. Here are some charts from today’s FT showing what’s happened.
I see a buying opportunity because:1/ Now is the beginning of the year, and capex budgets always start high and then shrink as the year progresses as companies decide they don’t need all that investment; 2/ Unlike normal operating costs, Capex gets amortized normally over 5 years and so the expenditure doesn’t hit the P&L all at once. Most of the companies shown packaged their FY’26 capex forecasts with FY’26 profit forecasts so investors could see the current year impact on profits; 3/ There will be an awakening by tech CEOs that much of this capex splurge won’t pay off — i.e., ROI will fall short of the cost of capital — as everyone is betting on the same AI payoff, and not everyone will win. Once this realization occurs future capex plans will be scaled back.The copyright of this article belongs to the original author/organization.
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