Which asset price went up sharply??
How is this calculated? If a company successfully takes one AI project to production, then it is counted out? meaning they are no longer adopting, but already adopted and taken out of the list??
Nothing new here. These capex numbers were announced by the companies in 2024, and only incrementally added in few cases. For ex: $GOOGL announced that they will do $75 B capex in 2025 at 2024, that number moved up to $85 B, but didn’t double or anything… And $GOOGL share price was trading between $150~$175 for multiple months and moved up only after the DOJ case… not because of their capex announcement.
In the case of $AMZN, not now, but in Nov 2024 I wrote Capex is $AMZN moat… They key point is while $AMZN numbers look really big, but it is only $20 B more than their D&A… in other words, that is the new capex, and the rest is actually maintenance capex…
This is something that is a concern. But, companies like $NVDA, $GOOGL has invested in other AI startups for sometime. Everyone knows about their coreweave investment, and they were invested in OpenAI… but sure, the scale of the new investments are big and concerning.
This is why I called when $NVDA misses revenue, that’s when AI bubble will pop, because that will create a cascading effect…
You invest $2B in AI and you have $2B saving in your operational cost, i.e,. JPM has recovered their investment in year one… do you understand what ROI in such case?