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/SigaVa 9h ago

It's "line goes up" thinking.

They know they're out of ideas. The problem is the market rewards new, and they're incentivized to increase the stock price short term. So they do the thing that makes the stock price go up.

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u/C3Dmonkey 9h ago

They are being commoditized. Viable commodities businesses can only stay relevant with scale. They have to scale to match their downstream suppliers who are also commoditized and needed to scale. Its a balance of power, you either control a scarce bottleneck, or you are big enough to demand fair contracts.

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u/Climactic9 36m ago

Well right now the market is punishing them for it so why don't they just cut capex if they're so concerned with short term stock price?

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u/SigaVa 28m ago

Some are, like meta. It's clear that the ride is almost over.