Key insights
- The author expresses concern over the sustainability of the current AI hardware boom, driven by hyperscaler CapEx. They argue that the market is overly optimistic, pricing stocks as if CapEx will continue to double annually without demonstrated ROI. A slowdown in orders from even a few major buyers could significantly impact suppliers, suggesting a timing risk that investors are currently ignoring.
I’ll start by saying I missed a lot of stocks booming every day and I’m having major fomo while holding duds like MSFT and META. I do remember the 2021 top though so for now I’ve been resisting lol
I am also looking at all these hardware stocks going parabolic and I don’t really understand how this is sustainable.
Yeah the AI buildout is real and there’s a lot of demand I get it. But basically the entire hardware boom is these big hyperscalers buying stuff. There’s no real ROI shown yet by any of them and it seems like the market is pricing these stocks as if the CapEx from the big boys is going to double again next year and the year after
What happens when one or two of those CFOs just goes “yeah we’re good for now” and slows down orders? like the demand doesn’t have to disappear, it just has to slow down a little and these suppliers are cooked.
Not saying it happens tomorrow. But the timing risk here feels like something people are just ignoring. Is everyone just riding it up and hoping they’re not the last one holding the bag?