Avoid hyperscalers, buy their hardware suppliers
The guest argued that investors should avoid Mag 7 hyperscalers and instead focus on the hardware and infrastructure suppliers they are funding.
The argument
Hyperscalers are diluting their equity and raising debt to fund massive capital expenditures, which benefits suppliers like memory manufacturers while dragging down the hyperscalers' own share prices.
The thesis, stress-tested
✓ What validates it
- ✓Hyperscalers announce cuts to AI CapEx budgets
- ✓Memory chip prices continue to rise
▸ Risks discussed
- ▸Hyperscalers curtailing CapEx could hurt suppliers
- ▸Stronger than expected GDP growth could justify high multiples
Hear it yourself
"views of Blockworks. Our hosts, guests, and the Blockworks team may hold positions in the company's funds or projects discussed. As always, investments in blockchain technology involve risk, terms, and conditions apply. Do your own research. Alright, everybody. Welcome back to another episode of forward guidance, round up edition. The trio's back after week off. Enjoying the sun. We're back. What's going on, guys? How you doing? What up? What up? What's happening? We're good. Everything and nothing. Yeah. I hung I hung some art up finally."
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