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- Wall Street's AI Boom Just Reached a Dangerous Milestone. History Says the Winners Could Change.
Wall Street has spent recent years rewarding nearly every company tied to AI, including hyperscalers, chipmakers, memory providers, cloud firms and equipment makers. A Columbia University estimate puts cumulative AI infrastructure investment and spending at about $9 trillion over 2025–2032, and says the sector would need more than $3.5 trillion in annual revenue by 2032 just to break even. The article argues that, as with the late-1990s telecom fiber build-out and 19th-century railroads, the biggest winners may be the businesses that use the infrastructure rather than those that build it, since builders often face overcapacity and weak returns. It points to industrial companies using AI for tasks such as predictive maintenance and logistics as potential beneficiaries, and presents the Industrial Select Sector SPDR ETF (XLI) as a complementary holding with a small allocation.
- 2 charts show why Wall Street is right to worry about tech stocks
Rising cost of capital could affect the financial statements of hyperscalers such as Oracle (ORCL) and Google (GOOG, GOOGL) in 2027, as they need fresh debt to fund AI infrastructure and free cash flow may turn negative. JPMorgan strategist Mislav Matejka forecasts hyperscaler free cash flow will turn negative in 2027, implying credit markets will drive more of the AI build-out. Consensus estimates for 2027 capital expenditures are already rising from levels experts believe are too low. Morgan Stanley sees total 2027 capex among hyperscalers reaching $1.6 trillion, up from $978 billion estimated for this year. Dan Ives of Yorkville expects capex to reach the trillions and over 1,000 datacenters to be built in the next few years.
- Wall Street tumbles as worries about AI trade and high oil prices weigh
- Tesla’s Flying Roadster Has Wall Street Talking About SpaceX, Not Cars
Tesla unveiled its rebooted Roadster at a demonstration in Waco, Texas, where the car drove up a vertical ramp, launched upside-down, performed midair rolls, and landed using thrusters. Musk said it reached 0 to 60 mph in 0.81 seconds, but the flying version is not for sale and the non-flying model is not expected in production until 2028. Analysts then turned to a possible Tesla–SpaceX merger, citing their intertwined dealings, such as SpaceX buying $318 million of Tesla Megapacks in Q2 and Tesla acquiring $2 billion of SpaceX shares in Q1. Analyst Dan Ives puts the odds of a merger before the end of 2027 at about 80%, and Kalshi odds for a deal before April 2027 rose from 30% to 55%. However, neither company has said it is considering a merger, and the article advises investors not to trade on these rumors.
- Wall Street tumbles as worries about AI trade and high oil prices weigh
The Nasdaq was on track for a weekly loss of over 4%, with CoreWeave down 12% on the day and about 25% over five sessions, and Broadcom down 3.6%. Concerns center on debt-heavy AI infrastructure firms that may not turn profits in time to repay borrowings, especially as borrowing costs are expected to rise. Oil jumped more than 3% on Middle East supply worries, while the S&P 500 fell 1.22% to 7,649.71 points, set for its steepest weekly loss since January, and the Nasdaq dropped 2.19% to 26,128.13 points. Hotter-than-expected inflation reports have reinforced expectations that the Fed will hold rates this month, while Barclays expects 25-basis-point hikes in December and January.
- Wall Street tumbles as worries about AI trade and high oil prices weigh
U.S. stocks fell sharply on October 16 as AI infrastructure names such as CoreWeave and Broadcom came under renewed pressure and oil jumped more than 3% on Middle East supply concerns. CoreWeave slumped 12%, cutting its five-session loss to about 25%, and its bonds sold off with yields above 15%. The S&P 500 fell 1.22% to 7,649.71, the Nasdaq dropped 2.19% to 26,128.13, and the Dow lost 0.55%. Investors worry that debt-laden AI infrastructure firms may not become profitable in time to repay borrowings, and some Anthropic investors are weighing a lower valuation for its upcoming IPO. The Nasdaq is on track for a weekly loss of more than 4%, its sharpest since June.
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The article argues that Amazon, trading at about $250 a share, is still worth buying for the author, who would buy it if he did not already own it. The main reason is that the stock looks appealingly valued: its forward P/E of about 24 is well below its five-year average of 39, while its price-to-sales ratio of 3.6 is slightly above the five-year average of 3. Amazon ranked fourth in the 2026 Kantar BrandZ Global Top 100, with a brand value of $1 trillion, and its shares have averaged annual gains of 22% over the past 15 years. The author stresses that a stock's absolute price means little on its own, so investors should compare it with earnings and sales and research each company in depth.
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- J.P. Morgan Stays Top of Extel’s All-America Equities Research Table
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