See the full story in the original article.
Read the original on Yahoo Finance ↗
Keywords
data centersartificial intelligenceAI investmentcloud computing
Open a keyword to see other news on the same topic.
Related news
- The Trillion-Dollar AI Bet: What It Means for Hyperscaler Investors
The five major hyperscalers, Alphabet, Microsoft, Amazon, Meta and Oracle, are expected to spend almost $780 billion on capex in 2026, up 87% year over year, and to exceed $1 trillion annually from 2027 through 2030. Financial risk is rising: Alphabet's long-term debt reached $98.2 billion, up 568% from four years ago, and Meta's was $83.7 billion; Alphabet posted negative free cash flow of $5.9 billion in Q2, Meta's free cash flow fell 91% year over year, and both have paused share buybacks. The article stresses that no one knows what returns will follow, and past spending booms such as railroads and telecom led to overbuilt capacity even though the infrastructure later enabled new businesses. Bain & Company estimates AI infrastructure spending could reach $1.5 trillion annually by 2031, and that the AI economy would need $6 trillion in yearly revenue to justify these outlays, with about two-thirds expected to come from innovation that does not yet exist.
- History Says Nvidia Stock Does This in November. Here's the 1 Thing That Could Break the Pattern.
Nvidia shares have gained 899% over the past five years (as of Oct. 15), and November has been mostly positive this decade, with the only decline coming in November 2025, when the stock fell 13%. Data center revenue rose 117% year over year to $89 billion in fiscal Q2 2027, with hyperscalers contributing about $49 billion. The article argues the key risk to this pattern is hyperscaler capital spending, which depends on the momentum of their cloud businesses. Hyperscaler backlogs have exceeded $2 trillion, and four of the top five will report third-quarter results within two weeks. If cloud growth slows, hyperscalers may cut capex, which would weigh on Nvidia's data center business.
- Oracle (ORCL) Has Fallen 54% and 80% of Analysts Still Say Buy. Why?
Oracle shares have fallen 53.84% over the past year, yet 80% of covering analysts still rate the stock a buy, with a median target 78.48% above the current price, according to CNN. The article notes revenue grew almost a third in the latest quarter and earnings grew faster, though that does not explain the drop. Analysts are weighing contracts to supply computing capacity worth $638 billion, far above annual revenue, while the market is focused on cash flow: capital spending of $75.66 billion over the past year exceeded $46.94 billion of operating cash, a gap funded by borrowing. The article frames the core question as whether returns on this spending arrive before the debt becomes a problem. The shares trade at 17.76 times expected next-year earnings.
- Here's How Microsoft's $175 Billion in Capital Expenditures Is Hurting Its Business
Microsoft expects capital expenditures of $175 billion this year, mostly for data centers supporting AI, Azure and Copilot. Azure revenue rose 43% last quarter to pass a $100 billion annual run rate, and Copilot reached 30 million paid seats. However, Microsoft does not disclose Azure's operating margin. Using the 36% and 39% operating margins of Google Cloud and AWS as benchmarks, the author estimates Azure's margin is likely well below Microsoft's overall level, so faster cloud growth could weigh on group margins. The author argues Microsoft must keep spending to avoid losing ground and prefers Amazon and Alphabet, which budget $220 billion and $200 billion in capex respectively.
- Neoclouds: Goldman Sachs Upgrades CoreWeave. Microsoft Shelves Nscale Project.
- Microsoft Pulls Out Of UK Data Center Deal With Nscale
According to The Telegraph, Microsoft has pulled out of a data center deal at the Loughton, Essex site with UK cloud provider Nscale, even though it is one of Nscale's two largest customers. Microsoft has not given a reason and declined to comment; the paper said the project faced repeated delays and National Grid did not expect power for the site until the 2030s. Nscale said its relationship with Microsoft "remains strong and long-term," blamed a London-wide grid issue, and said other contracts are unaffected. The article views this as a minor event tied to power at one site rather than weak demand, pointing to Microsoft's latest quarterly revenue, up 18% to $90 billion, and Azure growth of 43%.
Related markets
Latest news
- Why Meta's Q3 earnings could be a little hard to interpret
Meta is reporting its third-quarter earnings after the market closes Wednesday, and Yahoo Finance's Brian Sozzi says the report will be hard to interpret. Recent good news on Meta's AI products, including new models and an AI agent, may not appear directly in the results but will likely be discussed on the earnings call. The key uncertainty is how investors will react if Meta raises its capex outlook again: it could be seen as fueling those products, or as overspending on offerings not yet reflected in financials. Sozzi expects the market to give Meta the benefit of the doubt on higher capex, as long as the increase does not shock investors.
- Zerohash rolls out a new tool to move crypto without copying wallet addresses
Zerohash launched AUTH, a service that lets users move crypto, stablecoins and blockchain-based stock tokens between linked exchange accounts or self-custody wallets without copying wallet addresses or choosing a blockchain network. To transfer, users pick an account in an app that offers AUTH, sign in and approve the move, while the service handles routing and settlement and each app sets which assets and transfer types it allows. AUTH supports more than 600 connections, including Coinbase, Robinhood, Gemini, MetaMask and Phantom, with Coinbase, Robinhood and Gemini live and Kraken in beta. The launch comes as Zerohash's application for a national trust bank charter, returned by the Office of the Comptroller of the Currency in July, remains pending after a narrower refiling on Aug. 18.
- 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.
- Update on loan rate cuts as of the evening of Oct 19: MB, VietinBank, SHB, OCB join in
SHB, MB, VietinBank and OCB have announced loan rate cuts, following Agribank, Vietcombank, BIDV, ACB, LPBank and VietBank, with typical reductions of 1.5-2% per year. MB is cutting 1.5% per year for five priority sectors, to rates from 7.9% per year, and up to 2% in some cases; VietinBank is cutting up to 2% per year, while OCB offers up to 2.25% per year on some medium- and long-term loans for OCB Priority Banking members. SHB is cutting 1.5-2% per year for businesses and households and offers rates from 5.5% per year for lecturers and students at some universities. Vietcombank commits to cutting at least 2% through year-end, BIDV applies rates from 6% per year on short-term VND loans from 15/10/2026, and VietBank runs a VND 3,000 billion package. Specific benefits depend on borrower type, loan purpose, term and program conditions, following directives from the Government and the State Bank of Vietnam.
- Nvidia wins CPU business from Modal, previously exclusive to AMD and Intel
Modal, a San Francisco-based AI cloud startup that previously ran its AI agent workloads only on Intel and AMD processors, will begin using Nvidia's new Vera CPU. Early tests showed the Nvidia chip doubled work capacity for AI agents, and Modal plans to run it alongside Intel and AMD chips, assigning each task to the most efficient hardware, though integration requires substantial software changes. Modal recently raised $750 million in a round led by Accel at a $15.75 billion valuation and expects $1 billion in sales over the next year, with usage tripled and revenue up more than 15 times year-over-year. Nvidia projects at least $20 billion in Vera chip revenue this fiscal year in a market it estimates at about $200 billion, and says OpenAI, Anthropic, Oracle and Perplexity also plan to use the chips.
- America's EV Plans Have Died
Billions of dollars went into EV factories, dealerships and marketing after President Biden set a goal for 50% of new US car sales to be zero-emission by 2030, but EV sales have since fallen sharply. US EV sales dropped 30.7% in the first nine months of 2026, after the $7,500 tax credit expired on September 30 last year, and gas prices near $4.50 per gallon have done little to lift them. According to Kelley Blue Book, the average transaction price of a new EV was $54,754 in August, above the $50,089 average for all new cars. Ford's EV sales fell 80.2% to 6,047 in the third quarter, and it has no new EV planned until its Fathom launches next year, while Tesla holds over 50% of the market and no other major automaker has even 10%. The article says EVs could recover if gas prices reach $5 and stay there for months, but that is uncertain.
Get the briefing on Telegram or Zalo
Join the Upside Telegram channel or Zalo group for the Vietnam stocks and gold briefing at 8:00 and 19:00 (Vietnam time) on trading days, plus a weekly wrap on Saturday morning.