It has been a wild ride this past week as my META position came one full circle. After a solid earnings report, the stock initially gapped up about 10%, only to see those gains completely wiped out as the price slid back down over the following days. This earnings season has felt particularly punishing for big tech, with massive Capital Expenditure (Capex) being the primary culprit for the volatility.
It seems like every major tech player announcing ambitious plans for future AI expansion has met the same fate: their stock prices tank. Investors are clearly spooked by the eye-watering costs—with some estimates putting collective 2026 Capex for the "hyperscalers" at over $600 billion—and the uncertainty of when these investments will actually hit the bottom line. It makes me wonder if the market has reached a point of AI fatigue, where the "spend now, profit later" narrative is no longer enough to sustain these high valuations.
Looking at the current trend, I can't help but speculate whether the script would flip if a company took a different path. If one of these big tech giants stepped forward today and announced they were significantly reining in their AI spending to protect immediate cash flow and margins, would the stock price soar in relief? While it might suggest a lack of long-term vision, in this current climate where fiscal discipline is being rewarded over bold pivots, a "less is more" approach might just be what the market is craving.
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
