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Home Market Outlook Today's Market Summary The AI buildout is driving historic CapEx increases among hyperscalers, notably impacting bond markets and reducing big tech buybacks. Federal Reserve officials now cite surging AI CapEx as a contributor to persistent inflation, with expectations for annual spending to reach ~$1.2T by 2028. Rate hikes are the Fed’s only tool, but deliberate tightening may not curb hyperscaler CapEx or meaningfully weaken robust labor markets.
Hyperscalers like Alphabet remain cash-rich, financing CapEx strategically amid soaring cloud revenue and massive backlogs exceeding annual spend. Andrew Harnik/Getty Images News Regular readers will know that I've styled myself as “ the lone bull in the china shop ” this year, largely off the back of the shifts in hyperscaler capital expenditures, what we're colloquially calling the “AI buildout.” I'm a 10.56K Followers Analyst’s Disclosure: I/we have a beneficial long position in the shares of S&P 500, MSFT, GOOGL, AMZN, NVDA, META either through stock ownership, options, or other derivatives. I wrote this article myself, and it expresses my own opinions.
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Source: Seeking Alpha
