How To Play The Coming AI Capex Bust
Summary
- AI capex spending, driven by Amazon, Microsoft, Alphabet, and Meta, is fueling massive gains in data center and semiconductor stocks; 12 stocks are specifically listed.
- Warning signs point to a potential capex bust as efficiency gains, ROI doubts, and power constraints emerge; 12 concerns are discussed.
- The U.S. economy and stock market are heavily reliant on continued AI capex growth, with any slowdown posing significant downside risk for exposed stocks.
- While AI investment remains strong for now, watch for Big 4 spending announcements; a slowdown could trigger sharp corrections in high-multiple AI capex stocks by 2026-2027.
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While much of the attention of economic bears has been on tariffs, there is another economic risk that may be even larger. That is the potential for a major AI Capex investment bust. Notice I did not
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