Corporate capital allocation shifts to intangible assets
The host argued that US corporate capital deployment has structurally shifted toward intangible assets, concentrating massive optionality in a few mega-caps.
The argument
Citing Michael Mauboussin's 2024 capital allocation paper, the host noted that intangibles (R&D and SG&A) now exceed CapEx at 13% of sales. Furthermore, half of all excess corporate cash is concentrated in fewer than 70 companies, with 60% of incremental CapEx growth driven by just four firms: Amazon, Meta, Alphabet, and Microsoft.
The thesis, stress-tested
✓ What validates it
- —
▸ Risks discussed
- ▸High concentration risk in index benchmarks
- ▸Massive depreciation charges flowing through income statements in future years
Hear it yourself
"60% of the incremental dollars came from Amazon, Meta, Alphabet, and Microsoft. So this infrastructure build out is is in AI is very extremely concentrated. So, basically, if you you own or or you're underweight those four, you're taking very specific capital cycle bets today one way or the other."
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