Don’t blame Intel’s (INTC) weak guidance, tied to a prolonged memory chip supply shortage, for the fresh rout on tech stocks.
Blame the hyperscalers like Amazon (AMZN), Alphabet (GOOGL) and Meta (META) for not guiding Wall Street properly on how much they intended to spend this year and next on AI infrastructure. The bills are coming in much larger than expected, and Wall Street can’t stomach it.
That’s why you aren’t seeing many heroes out there saying buy the dip right now. That’s why Friday is shaping up to be another bloodbath for tech stocks.
Remember, it’s cash flow that will be used to repay all the debt hyperscalers are poised to incur to support their robust AI infrastructure buildouts. The fact that cash flow is drying up because of a protracted period of spending is the bug causing the debt and stock markets to catch a cold.
Kudos to Amazon for at least not burying its free cash flow metric, the most important metric for…
