WS #16578
The AI narrative is facing a severe credibility crisis as major tech firms report earnings that highlight unsustainable capital expenditure levels. Alphabet's 12.6% decline and Amazon's 7% premarket drop signal that the market is punishing companies for over-investing in AI infrastructure without clear revenue visibility. This selloff is spreading to semiconductor plays like Intel and Micron, suggesting a broad reassessment of the tech hardware cycle. The market implication is a sustained risk-off environment for high-multiple growth stocks until capex efficiency is demonstrated.
AI Capex Selloff and Tech Earnings
The AI narrative is facing a severe credibility crisis as major tech firms report earnings that highlight unsustainable capital expenditure levels. Alphabet's 12.6% decline and Amazon's 7% premarket drop signal that the market is punishing companies for over-investing in AI infrastructure without clear revenue visibility. This selloff is spreading to semiconductor plays like Intel and Micron, suggesting a broad reassessment of the tech hardware cycle. The market implication is a sustained risk-off environment for high-multiple growth stocks until capex efficiency is demonstrated.