Quotes of the Day: No Letup In Sight

Per yesterday’s video, at the moment it doesn’t look like all that capex spend is going to let up in 2026:

BofA:

Alphabet: “Looking out to 2026, we expect a significant increase in CapEx.”

Meta: “Our current expectation is that CapEx dollar growth will be notably larger in 2026 than 2025.”

Microsoft: “Total spend will increase sequentially, and we now expect the FY 2026 growth rate to be higher than FY 2025.”

Amazon: “We expect our full year cash CapEx to be approximately $125 billion in 2025, and we expect that amount will increase in 2026.” 

 

As I implied in the video, I’m quite certain that this is a bubble, but that the timing of its ultimate deflation is anybody’s guess. 

Macro-thinker Bob Elliot seems to agree:   emphasis mine...

“Markets are increasingly making the bet that the AI economy can become totally disconnected from the real economy, even as the real economy challenges for the AI names become increasingly apparent.

Ultimately the investment boom has to generate higher revenue (not just better margins) in order to pay for itself and so far there are few signs that it’s happening. While it’s hard to know the exact moment when the markets will recognize these shifts, the cracks are clearly emerging.”