the irony of all of this is big tech is increasing their capex spendbut the capex beneficiaries (semis) aren’t being rew…

the irony of all of this is big tech is increasing their capex spend

but the capex beneficiaries (semis) aren’t being rewarded like they were earlier in the year

at the same time, big tech has to dillute and take on debt to afford to even spend the capex, which is causing issues in the credit market

and then you have the iran war which doesn’t help with oil

ultimately, I think there needs to be more evidence of a catalyst to create a structural sustained selloff given earnings/growth/labor market doesn’t support it, but it feels very obvious that the credit markets don’t want to support all this AI buildout

and everything feels like a falling knife so few people are willing to step in and buy until there is meaningful technical recovery

which is getting discounted into the semi’s valuations AND the hyperscalers

so the question is…what’s the better buy?

to me, it is obviously the hyperscalers on sustainability of earnings/growth but with more debt and dilution, their stocks have the risk of continuing to stay flat until fcf comes back to being positive

gold and bitcoin also are participating as risk is being taken off across the board

and then the fed raising rates makes it even harder for neoclouds to justify their ability to take on debt

long term, i think there are many names that are fundamentally undervalued given their growth and prospects but sentiment across the entire market, even after record big tech earnings, is just not good

nasdaq wiping out $1.5T of market cap today

Source: amit