According to Bank of America strategist Sebastian Raedler, AI investors could still lose money even if the technology performs as expected, mirroring past capital cycles such as railroads and fiber optics. Hyperscaler capex expectations for the next 12 months rose from $330 billion in early 2025 to $1 trillion, about 3% of US GDP. Average token prices have fallen around 50% since the summer, so revenue stalls even as usage rises. After the warning, NVIDIA fell 1.43% to $214.13 and Microsoft fell 1.93% to $529.05. The article argues Microsoft is better positioned than NVIDIA against a slowdown in AI spending, and flags Microsoft's next earnings versus about 45% constant-currency Azure growth guidance as the key test.
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NVDAMSFTAI investmentartificial intelligence
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Related tickers and likely impact
MSFT
▼ Likely negativeMicrosoft
Relevance: medium
| Market | US stocks |
|---|---|
| Sector | Information Technology |
| Industry | Systems Software |
| Market cap | $4.0T |
| Close on 10/16/2026 | 528.95 |
| Change that session | -1.94% |
NVDA
▼ Likely negativeNvidia
Relevance: low
| Market | US stocks |
|---|---|
| Sector | Information Technology |
| Industry | Semiconductors |
| Market cap | $5.2T |
| Close on 10/16/2026 | 214.14 |
| Change that session | -1.42% |
Impact is scored by AI from the headline and may be wrong. It is not investment advice.
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