Big Tech is expected to spend $400 billion on AI infrastructure in 2025. That’s more than the entire EU spent on defense last year. The kicker? That number only includes four of the Magnificent Seven.

Alright guys, thank you for tuning in. We’re just starting to wrap up Q2 earnings as well as another big week on Wall Street. I just want to get you a couple of quick game notes as it relates to what we’re learning coming out of earnings, everything AI, and those CapEx numbers.

The market is basically thinking about this in three ways:

First – High AI capital expense, high revenue and growth, stock jumps. We saw that in the case of Meta, Google, and definitely Microsoft, as their Azure business grew by 39% and the company hit a $4 trillion market cap.

Second – High AI CapEx, modest revenue and growth, stock dips. We saw that with Amazon, as AWS posted 18% growth and Amazon’s CapEx is expected to hit about $118 billion this year. I’ll also throw Tesla in there.

Third – No AI CapEx, no movement. I’ll use Apple as an example here, as they’re not spending nearly as much as their Magnificent Seven peers. The revenue is good but not off the charts, and the stock is sort of treading water as a result.

In sum, Morgan Stanley is projecting $2.9 trillion of AI capital expense through 2028. The growth in this space has already been crazy and is expected to continue. The question is who will win out. It feels like something has to break between now and then. I’m not sure the what, the where, or the when.

As always, thank you for tuning in. I appreciate you all in the Wall Street Game News community. Let me know how you’re feeling about these numbers, these companies, and this market as we reach new all-time highs.

Be good out there!