To The Moon

Tech Exodus, Oil Influx: $660 Trillion AI Spending Spooks Investors!

Despite $NVIDIA(NVDA)$ CEO Jensen Huang's public reassurances that artificial intelligence (AI) will not replace the software industry, the staggering AI spending plans disclosed by tech giants—totaling over $660 billion this year alone—have triggered a panic sell-off among investors. A massive rotation of capital from "cash-burning" tech stocks to "cash-generating" oil stocks is quietly underway.

Sky-High Spending Triggers Sell-Off

Last week, tech giants unveiled ambitious AI investment blueprints during earnings season, immediately shaking the markets. Amazon announced capital expenditure plans of up to $200 billion for 2026, $50 billion above market expectations. Meta stated that this year's capital expenditure will reach $135 billion, nearly double that of 2025, with the majority going into AI.

Cumulatively, these figures pushed the planned total spending of major tech companies beyond the $660 billion mark this year. Faced with such massive "burn rates," traders voted with their feet, causing a sharp drop in tech stocks—even in the face of core defenses like "thinking the software industry will decline and be replaced by AI is the most illogical thing in the world."

The Appeal of the "Old Economy": Stability and Cash

As tech giants pour massive cash into data centers, chips, and energy supplies, investors are turning to an industry that seems "obsolete": oil and gas. According to a Financial Times report this month, U.S. oil and gas stocks have risen 17% since the beginning of the year. The market capitalizations of $Exxon Mobil(XOM)$ , $Chevron(CVX)$ , and $ConocoPhillips(COP)$ have surged 25% over the past 12 months.

Major European oil companies have also seen their share prices rise. $ProShares K-1 Free Crude Oil ETF(OILK)$ $Texas Oil Index ETF(OILT)$

This rally has occurred even against a backdrop of weak international oil prices, highlighting its counterintuitive appeal. The key lies in the fact that even when oil prices fall, major oil companies remain profitable and can provide stable cash returns to shareholders through stock buybacks and dividends. In contrast, tech giants' massive AI plans have yet to yield significant financial fruit and may instead lead to a sharp deterioration in cash flow.

A Stark Contrast in Financial Health

Behind this capital shift lies a vast divergence in the financial fundamentals of the two sectors.

The Oil Sector's "Cash Cow" Characteristics: According to CNBC, the cash returns (including dividends and buybacks) of several supermajors remain stable at around 50% of their operating cash flow. Although maintaining these levels may require borrowing, balance sheets remain generally sound with reasonable debt levels.

The Tech Sector's "Cash Flow Cliff": $Morgan Stanley(MS)$ predicts that $Amazon.com(AMZN)$ 's free cash flow could turn negative this year, reaching -$17 billion; Bank of America even forecasts -$28 billion. Barclays expects $Meta Platforms, Inc.(META)$ 's free cash flow to plummet by 90% this year. $Alphabet(GOOG)$ 's long-term debt, meanwhile, quadrupled last year.

The Battle Between Long-Term Narrative and Real Returns

The shift in market sentiment is essentially a choice between "jam tomorrow" and "jam today."

The International Energy Agency (IEA) recently acknowledged that oil demand will continue to grow at least until 2050, weakening long-standing warnings of "peak oil demand" and providing new real-world support for oil stocks. Meanwhile, geopolitical events have pushed oil prices higher, further improving the industry's outlook.

Although analysts have not completely written off the tech sector—with most banks still issuing "buy" ratings on tech giants—traders have clearly become more cautious. In an environment of increasing uncertainty, the traditional energy sector, with its stable profits, strong balance sheets, and immediate shareholder returns, is once again becoming a safe haven for capital.

This great migration of capital—from "bits" to "atoms," from future narratives to present profits—may have only just begun.

My Test Options Strategies for XOM. COP, CVX:

$ConocoPhillips(COP)$ Soars +3.45%: Hits 52-Week High on Bullish Cash Flow Guidance

🚀 Core Market Drivers
The stock is fueled by its strong 2026 guidance, including plans to return 45% of CFO to shareholders and a clear path to $70B incremental FCF by 2029. Positive news regarding potential onshore agreements in Syria adds to the bullish sentiment.

🎯 Key Price Levels

• Primary Support: $107.50 (Previous close & psychological level)

• Strong Resistance: $111.27 (Just tested & broken)

• Immediate Pivot: $111.21 (Today's close, acting as new support)

【Strategy One: Bull Put Spread】

• Buy 1x COP 20 Mar 2026 $112.00 Call

• Sell 1x COP 20 Mar 2026 $117.00 Call

【Strategy 2: Call Ratio Backspread (Vega/Volatility Play)】

• Sell 1x COP 20 Mar 2026 $112.00 Call

• Buy 2x COP 20 Mar 2026 $117.00 Call

$Exxon Mobil(XOM)$ Hits 52-Week High: Strong Bullish Momentum Propels Stock to $156.93

Core Market Drivers ⚙️
Strong Q4 results, driven by record refinery margins and cost-cutting, continue to support the stock. Geopolitical tensions in the Middle East (e.g., Iran, Strait of Hormuz) and potential expansion into OPEC nations under favorable U.S. policy are key bullish catalysts. Recent warnings about EU methane regulations highlight potential future cost pressures for competitors, indirectly benefiting XOM.

Key Price Levels 🎯

• Immediate Pivot / Primary Support: $151.59 (Previous close & breakout level).

• Strong Resistance: $156.93 (Today's & 52-week high). A decisive close above this level could open the path to new highs.

• Major Support: $112.22 (Recent key support zone).

【Strategy 1: Bull Call Spread】

• Buy 1 XOM Mar 20, 2026 $155 Call

• Sell 1 XOM Mar 20, 2026 $165 Call

【Strategy 2: Call Ratio Backspread (Vega/Volatility Play)】

• Buy 1 XOM Feb 20, 2026 $155 Put

• Sell 2 XOM Feb 20, 2026 $150 Puts

$Chevron(CVX)$ Tests 52-Week High: $186.52, Geopolitical Momentum Fuels Rally 🚀

Core Market Drivers 🌍

1. Global Expansion: Chevron is aggressively expanding its footprint, winning exploration licenses in Libya and signing global cooperation agreements with Turkey, signaling strong growth ambitions.

2. Geopolitical Tailwinds: The company is a primary beneficiary of U.S. foreign policy shifts, gaining significant operational advantages in key OPEC nations like Venezuela, Iraq, and Algeria.

3. Solid Fundamentals: Despite lower oil prices, Q4 earnings exceeded expectations with production surging over 20% year-over-year, showcasing operational resilience.

Key Price Levels 🎯

• Immediate Pivot / Strong Resistance: $186.52 (Today's High & 52-Week High). A decisive break above could open the path to $190+.

• Primary Support: $155.29. This level has held firm and would be a critical test in any significant downturn.

【Strategy One: Bull Put Spread】

• Sell 1 CVX March 20, 2026 $180 Put @ $1.115

• Buy 1 CVX March 20, 2026 $175 Put @ $0.375