Everyone knew it was a gamble, that is why there is an AI bubble, a big enough crash will come along eventually.
The thing is "AI" as we know it require constant monetary input, the newest chips, new training, maintenance to avoid model drift, constant improvements to keep up with competition... CapEx will not be a problem that get solves anytime soon
The AI players are hoping that someone folds and they end up being the last one at the table, but even then, the number does not bode well because the revenue will still not keep up with the expenditure.
Tesla Plunges 14.5% Post-Earnings: Can AI Spending Burn Rate Be Sustained?
Tesla tumbled 14.52% after reporting Q2 operating margins collapsing to 1.4% and free cash flow turning negative, as capital floods into AI and Robotaxi initiatives. Management frames the pivot as a long-term bet, but Wall Street questions whether core automotive profitability is being systematically diluted. With Alphabet reporting massive capex the same day, the "heavy investment, slow returns" narrative across mega-cap tech faces mounting pressure. With valuation still anchored to AI rather than autos, is this selloff a risk reset or a trend reversal?
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.
Comments