The first step is a significant increase in capex, occurring in the first 1-2 years. The second step is to continue increasing capex substantially, with free cash flow nearly exhausted or even turning negative, and dividends reduced, which is a matter for 2026. Now it seems the third step has begun. $Alphabet(GOOGL.US) wasn't satisfied with just long-term bond financing and even kicked off equity financing, and $Meta Platforms(META.US) surprisingly followed suit. It's very clear how FOMO the industry leaders are, showing a firm bullishness on AI. Considering the upcoming IPOs of three behemoths, the absorption of liquidity (whether by draining non-tech sectors, the crypto circle, or consuming macro liquidity) will be very fierce. Fluctuations in liquidity expectations will amplify market volatility. The overnight market is turbulent, just recording this.
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