AMZNAmazonBullishAmazonGOOGLAlphabetBullishAlphabetMSFTMicrosoftBullishMicrosoftCRDOCredo Technology Group HoldingNeutralCredo Technology Group HoldingIRENIREN LIMITEDNeutralIREN LIMITEDMETANeutralNBISNebius Group N.V.NeutralNebius Group N.V.

6d ago on

What is causing the decline in AI favorites ($NBIS, $IREN, $CRDO)? And why are hyperscalers ($GOOGL, $AMZN, $MSFT) surging? The AI market paradox following the election stems from the possible end of the era of unchecked CapEx growth. A Democratic victory will trigger strict regulatory scrutiny. Add to this pressure on cash flows (S&P’s downgrade of its outlook for $META to negative) and a slowdown in AI spending growth by 2028: down to 16% for hyperscalers and 6% for niche cloud providers. For hyperscalers, the forced slowdown in CapEx is a blessing: the market is pricing in protection for FCF and credit ratings. But the giants’ CapEx is contractors’ revenue. Selective debt financing and regional barriers are weighing on the multiples of CRDO (-10%), NBIS (-7%), and IREN (-11%). My conclusion: the phase of expanding AI capacity at any cost is in danger of coming to an end. Because of this, capital is now shifting away from "shovels and picks" toward balance sheet strength and FCF yields. Therefore, it’s worth buying into the dip in AI infrastructure by betting on the strongest players.

AMZNAmazonNeutralAmazonNBISNebius Group N.V.BullishNebius Group N.V.AMDNeutralCIFRCipher DigitalBearishCipher DigitalCORZCore ScientificBearishCore ScientificCRWVCoreWeave, Inc.BearishCoreWeave, Inc.HUTHut 8BearishHut 8IRENIREN LIMITEDBearishIREN LIMITEDRIOTRiot PlatformsBearishRiot Platforms

1w ago on

How will Hinohosa’s victory in Texas affect $NBIS? Positively. But the situation will be different for those providers that have been building infrastructure there. $IREN may end up being the hardest hit. The company has two facilities in Texas: • Childress: A large campus with a capacity of up to 750 MW, connected to the ERCOT grid. • Sweetwater: The Sweetwater 1 site and planned expansions such as Sweetwater 2. For example, $CRWV has signed contracts to use capacity at the Helios campus. And $CIFR is building its Black Pearl facility near the city of Wink for AWS under a 15-year lease. $RIOT has also signed a data center lease agreement with AMD at its Rockdale site, with the option to expand to 200 MW. $HUT has commercialized 704 MW of IT capacity at its Beacon Point campus, and $CORZ is retrofitting its site in Denton. The AI computing shortage will intensify, meaning that NBIS, which are building infrastructure in other regions, will benefit from this. We may see new projects put on hold, which will leave many providers and Neocloud unable to scale their capacity. The current fleet of AI clusters and contracted electricity capacity is too small to meet the needs of hyperscalers. Moreover, the financing currently being raised for data center construction in Texas, with interest rates ranging from 7% to 15%, is intended for future scaling. This means that project delays will likely lead to a decrease in ROI and solvency in future periods. As a result, Texas could transform from an AI hub into "scorched earth," causing companies that have built their AI infrastructure there to suffer losses.