AI CapEx cycle has room to run
The guest argued that the AI CapEx cycle and associated chip stocks can sustain momentum longer than bears expect due to strong narrative feedback loops.
The argument
High valuations allow companies to shore up balance sheets and fund acquisitions using overvalued equity, as seen historically with Tesla and currently with SpaceX. This reflexive feedback loop can delay the expected valuation correction for several quarters.
The thesis, stress-tested
✓ What validates it
- ✓Continued breakout earnings and strong RAM demand guidance from Micron
- ✓Successful large-scale all-stock acquisitions by high-valuation tech companies
▸ Risks discussed
- ▸Violent pullbacks due to extreme upside volatility
- ▸Hyperscalers going free cash flow negative to fund CapEx
Hear it yourself
"Now as a result of the perception that it's completely over, crude oil has sold off to basically pre crisis levels or about the same level as where the crisis started, both time spreads and flat price. And as we're recording on Wednesday afternoon, we're actually below the two hundred day moving average, which is at 69 spot 92 on the WTI August chart, and we're only about a dime below that as we're recording, so it's it's not much. This is the price level that's held up the market, really. We we haven't traded below it hardly at all in 2026. Do you think that, it keeps going? Are we are are we done yet? Or is we're gonna are we gonna find a bottom here in crude oil? Well, in terms of short term trading, I would defer to you."
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