The entire stock market is propped up by the “Magnificent 7”, and without their outperformance over the last 2 years the market would be flat. And all of the gains to the Mag 7 stocks have come from increasing AI infrastructure. They’re essentially forced to keep spending more or investors will lose confidence and trigger a downward spiral. Of course they will eventually have to show revenue from that investment or the whole thing collapses. To put into context just how much large Nvidia has gotten since ChatGPT was unveiled - its market cap is now larger than GDP of EVERY nation aside from the US, China and Japan. And that’s from selling the chips that the hyperscalers (Microsoft, Alphabet, Meta, Amazon, Apple, Tesla) need for their AI. We are at dystopian sci-fi levels of concentration in the economy now.
The entire stock market is propped up by the “Magnificent 7”, and without their outperformance over the last 2 years the market would be flat. And all of the gains to the Mag 7 stocks have come from increasing AI infrastructure. They’re essentially forced to keep spending more or investors will lose confidence and trigger a downward spiral. Of course they will eventually have to show revenue from that investment or the whole thing collapses. To put into context just how much large Nvidia has gotten since ChatGPT was unveiled - its market cap is now larger than GDP of EVERY nation aside from the US, China and Japan. And that’s from selling the chips that the hyperscalers (Microsoft, Alphabet, Meta, Amazon, Apple, Tesla) need for their AI. We are at dystopian sci-fi levels of concentration in the economy now.