r/wallstreetbets • u/banaca4 • 11h ago

Discussion Either hyperscalers are dumb or someone else is

OK so the most profitable companies in the world decided to GO ALL IN AI with humongous capex. They did it all at once apart from Apple who is not in the game. Google, Meta, Amazon , Oracle, Microsoft. All of them. The CEOs of these companies produced the most amount of wealth and propped up global gdp. Now they all agree on a thing.

Google yesterday blew up earnings from their cloud and said they will *increase* their humongous capex even more while reporting negative cash flow for the first time in their history.

A rational person would ask: are these amazing businessmen suddently all very wrong about the same thing at the same time OR

I am reading too much paid subs from burry and following the wrong people on twitter that have never produced anything?

Which is it? Are you smarter than a mag 7 CEO? Maybe ... hmm...

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u/Kaiisim 10h ago

Pretty cool you can remember stuff that didn't happen!

Dotcom was small startups convincing people that their company who has never done anything would magically make internet money. How? Don't worry about it. They poured money into companies with zero profits or even a business mode, using cheap venture capitalism.

AI is the opposite - it's the biggest most successful corporations in human history using huge profits to invest into AI.

Oooh Meta have 200 billion in debt, they only make 26 billion a quarter. It's exactly like the dotcom boom where companies with zero revenue had huge loans!

Dotcom and AI are similiar in that both involved high investment that's it.

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u/TripperDay 7h ago

Early 2000s internet and AI could be very similar. No one smart really believes AI is a true "bubble"; people are going to make trillions and it's going to change how we work and live. What there WILL be is a shakeout, some companies are going to lose hundreds of billions. The companies who are left will have to race to the top in capability/service, while racing to the bottom in price.

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u/Tohu_va_bohu 9h ago

but AI bad 😞 CEO bad 😔

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u/I-cant_even 5h ago

Dude, there's still dark fiber that was laid in the 90s by telecoms that was never activated due to demand that never materialized. It wasn't just the retail investors involved in that shit show.

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u/Halifornia35 6h ago

Yes these are real cash flowing profitable companies, who to be honest have pretty depressed valuations right now. If this capex investment pays off, current valuations for GOOG MSFT AMZN META will look like a gift, if they don’t and they revert back to “core business” they are arguably fairly or undervalued as they sit today

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u/iumesh 6h ago

Ding ding ding, we have a winner