Key insights
- The author suggests the recent market sell-off is a temporary risk-off move ahead of data releases, not an end to the 'bottleneck trade.' Significant capital expenditures from tech giants like Google and Meta, alongside anticipated IPOs from AI firms (SpaceX, Anthropic, OpenAI), are expected to drive further investment into chips, memory, and compute infrastructure. This sustained demand for hardware and AI-related compute suggests continued bullishness for the sector, implying a potential rebound after the data-driven pause.
Why is the bottleneck trade reversing when CapEX is only continuing to go up?
Google just raised what, 80 billion?
Meta just announced more CapEX…
I wouldn’t be surprised if Amazon and the rest of big tech does the same…
Isn’t most of that money going to be going straight to chips and memory again?
Then on top of that how much are SpaceX, Anthropic, and OpenAI raising when they go public this year?
It’s all going to go to the same place, no?
Bottlenecks for more compute.
Something tells me this most recent sell off was to risk-off for data next week and not because this bottleneck rally is anywhere near over.
Thoughts?