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rosy739-stg

@7393com

6 Nov, 06:21Latest

**“Expectations for AI expansion have been lowered” **raises the risk of a broad semiconductor decline, and the bottom is not yet in sight.
The market is starting to worry about a slowdown in data center construction. A Reuters report on November 5 said that after the midterm elections, investors were concerned that additional regulation, electricity bill protections, and local construction restrictions could affect the expansion of AI infrastructure. Axios also reported that the Texas governor-elect proposed a pause on new data center construction.

DIA

QQQ

SMH

Anthony J Lewis

5 Nov, 22:00

Chief Financial Officer of IREN

Our planned CapEx for the remainder of the fiscal year is approximately $15 billion. This is down from the prior estimate, reflecting the flexibility to pace data center and GPU CapEx.

AlvaMixedThe estimate for remaining capital expenditures in fiscal 2027 was lowered to approximately $15 billion, reflecting that data center and GPU investment can proceed at a slower pace and supporting a downward revision to expansion expectations; at the same time, it was still said that demand for computing power is strong and supply is tight.

Josh Wolfe

6 Nov, 18:37

Co-Founder & Partner at Lux Capital, Trustee of the Santa Fe Institute

I don't know the odds of the belief cracking in GPU prices 'always going up' upon which so much financing + debt is premised... ... or it becomes the equivalent of housing prices that couldnt go down until they did.... ... but if they do... ... its a big problem x.com

AlvaSupportsHe warned that if confidence in continued GPU price increases breaks down, financing and debt that depend on that assumption will face serious risks, reinforcing the possibility that chip prices and expansion financing could drag each other down; he did not estimate the probability of this occurring.

Zephyr

6 Nov, 18:28

AI & Semiconductor Analyst at Citrini Research

U are reading too much into it ... It was probably a 50MW-100MW A100 deal ... Microsoft has changed its compute strategy (cancelling Nscale deal, IREN delays) ... They want to self build/own more compute rather than rent it ... Microsoft can easily shift this internally to 25MW-40MW of Hoppers x.com

AlvaChallengesThe original agreement is estimated to have been for 50–100 MW of A100s, potentially replaceable by 25–40 MW of internally developed Hopper capacity. The view is that Microsoft’s shift toward building its own compute capacity weakens the conclusion that non-renewal amounts to a contraction in expansion; this is analyst speculation.

Walter Bloomberg

6 Nov, 18:37

Financial news account covering global markets, economic data and geopolitics

Morgan Stanley estimates that 12 gigawatts of planned US data-center capacity could face delays by 2030 following Democratic midterm victories. ... 2027 projects: Largely unaffected ... 2028 capacity at risk: 4.9GW ... The bank expects new state-level requirements, particularly in Texas and Ohio, to slow project approvals. x.com

AlvaSupportsNew requirements in Texas, Ohio and elsewhere are expected to slow approvals, putting 4.9 GW in 2028 and a cumulative 12 GW through 2030 at risk of delays, supporting a downward revision to medium-term expansion expectations; projects in 2027 are largely unaffected.

Zephyr

6 Nov, 18:12

AI & Semiconductor Analyst at Citrini Research

Microsoft was renting A100s from Oracle for powering Bing and they won't renew that contract ... Oracle probably wanted a premium on those A100s and MSFT walked away ... Overreaction tbh x.com

AlvaChallengesBy limiting the non-renewal to the A100 leases used by Bing, this suggests the market reaction was excessive, weakening the inference that Microsoft is broadly scaling back AI expansion. The premium explanation is speculative, and the details have not yet been confirmed by the company.

Walter Bloomberg

6 Nov, 17:38

Financial news account covering global markets, economic data and geopolitics

*Microsoft winding down Oracle deal for AI cloud capacity x.com

AlvaSupportsAccording to information from Walter Bloomberg that has not yet been confirmed by the company, Microsoft is gradually ending its AI cloud capacity agreement with Oracle, increasing the risk that capacity purchases by major buyers will contract and expansion expectations will be revised downward.

Alfonso Peccatiello

6 Nov, 17:01

Founder of Palinuro Capital, Founder & CEO of The Macro Compass

It looks to me like there is a 50% chance that equities are going to be down 20, 30% next year as we are at peak CapEx cycle. ... And then there is a 50 chance where the CapEx cycle isn't unwinding, at least not to the extent that people think. Next year, we will really have 1,200,000,000,000. We will really have the earnings up 20%. podcasts.apple.com

AlvaMixedThere is an estimated 50% chance each that capital expenditure will peak next year and the stock market will fall 20%–30%, or that investment will not contract significantly and earnings will rise 20%; the extent to which expansion materializes will determine the direction of downside risk.

Walter Bloomberg

6 Nov, 16:28

Financial news account covering global markets, economic data and geopolitics

OpenAI will keep investing in AI data centers despite election results, CFO tells CNBC x.com

AlvaChallengesThe finance chief said the election results would not prevent continued investment in AI data centers, weakening the view that policy shocks would prompt major compute buyers across the board to scale back expansion.

Vistra Corp.

6 Nov, 15:00

Integrated retail electricity and power generation company

ERCOT prices, however, have been trending lower. We believe this is due to several factors, including some crypto mining facilities coming offline so they can convert into data centers as well as the data center audit and permitting pause. We do not see this as a long-term impact.

AlvaMixedThe view that data center reviews, permitting pauses, and mining-facility conversions have jointly weighed on ERCOT prices supports the notion that expansion bottlenecks are already having an impact; however, the expectation that the shock will not last long tempers the risk of sustained downward revisions.

Walter Bloomberg

6 Nov, 14:16

Financial news account covering global markets, economic data and geopolitics

The European Central Bank is considering a review of banks' exposure to data-center financing, Bloomberg reports. x.com

AlvaSupportsAccording to Bloomberg, the European Central Bank is considering reviewing banks’ exposure to data center financing, increasing the risk that financing for AI expansion will face regulatory scrutiny; the review is still under discussion.

Cristiano R. Amon

6 Nov, 13:56

President and CEO of Qualcomm

We continue to see strong demand for Data Center compute and feel very good about our fiscal 2027 and 2029 targets. x.com

AlvaChallengesSays data center computing demand remains strong and expresses confidence in its FY2027 and FY2029 targets, weakening the view that expansion concerns have broadly led chip suppliers to lower expectations.

Walter Bloomberg

6 Nov, 13:25

Financial news account covering global markets, economic data and geopolitics

Yardeni Research says Thursday's sharp selloff was overdone, despite growing political opposition to AI infrastructure. ... Yardeni argues these obstacles are “just speed bumps” that could prevent the AI boom from overheating. x.com

AlvaChallengesThe view that Thursday’s sell-off was overdone and that policy obstacles are merely speed bumps to prevent AI build-outs from overheating pushes back against the judgment that lowered build-out expectations will drive a sustained, broad-based decline in semiconductors.

Mohamed A. El-Erian

6 Nov, 12:18

Chief Economic Advisor at Allianz, Rene M. Kern Practice Professor at Wharton

The broader market impact of yesterday’s selloff in the NASDAQ, the largest since March 2020, is a reminder of how much is levered on the AI trade -- for both good reasons (productivity promise, investment scale, IPO prospects, etc.) and less good (circular/interdependent financing, excessive leverage, etc.). x.com

AlvaSupportsHe believes that circular financing and excessive leverage in AI trading amplify market shocks, reinforcing the risk of cascading sell-offs triggered by downward revisions to expansion expectations; for economic growth in 2027, he only adjusted his risk assessment.

Jukan

6 Nov, 11:32

Semiconductor & AI Infrastructure Research at Citrini

Taiwan’s KYEC lowered its Q4 guidance due to delays affecting a major GPU, believed to be NVIDIA’s Rubin, caused by HBM4 yield issues at a memory supplier. x.com

AlvaSupportsAccording to Jukan, though not yet confirmed by the company, HBM4 yield issues have delayed GPUs and led KYEC to lower its fourth-quarter guidance, increasing the risk of delays to AI chip deliveries and expansion plans. Any connection to Rubin remains speculative.

Skanda Amarnath

6 Nov, 09:11

Co-Founder and Executive Director of Employ America

They're all, I think, now controlled by Democratic governors. ... Most, most, the power related data center construction kind of resides at the state level. State and local, not federal. ... Nevertheless, I feel like this is going to be a bit of a sea change in terms of the politics now where, if you did pick 5 or 6 governors and they all are of the same party, could presumably even coordinate their own efforts if they really wanted to. youtube.com

AlvaSupportsHe believes that power-related data center construction is primarily under state and local jurisdiction, and that if 5–6 fellow-party governors coordinate their actions, they could amplify the risk of a post-election downward revision to AI expansion.

Gavin Baker

5 Nov, 19:07

Managing Partner and Chief Investment Officer of Atreides Management

Gina Hinojosa, has explicitly said that all currently permitted datacenters in Texas will be allowed to finish construction. This essentially covers all of the 2027 and likely well into 2028. ... all *newly* permitted datacenters going forward for delivery in 2028/2029 will pay taxes, commit to no increase in power prices for consumers, don’t impact water availability for people, be constructed with union labor and give “Texans a seat at the table.” x.com

AlvaMixedHe judges that the permitted projects cover 2027 and may extend into 2028, reducing near-term delivery risk; new permitted projects, meanwhile, face conditions concerning taxes, protections for residents’ electricity and water services, union labor, and community participation, supporting the view that the bar for subsequent expansions has risen.

Patrick O'Shaughnessy

5 Nov, 21:22

Founder and CEO of Positive Sum and Colossus; host of Invest Like the Best

Ben Thompson (@benthompson) on why we might run out of capital before we run out of demand for compute: ... I'm worried about the timing mismatch in terms of the actual return on investment producing enough revenue to fuel investment. ... Ideally we actually flip back to free cash flow funding this, but if there's a gap there, if we don't get there soon enough, then we could have a big blowup. ... I think the economic impact is going to be astronomical. x.com

AlvaMixedHe is concerned that cash flows from investment returns may not materialize fast enough to meet financing needs, potentially constraining expansion due to funding pressures and supporting the risk of downward revisions to investment expectations; at the same time, he remains optimistic about AI’s long-term economic value.

Steve Hou

5 Nov, 20:06

Head of Research at Silicon Data

AI is almost certainly not over. It’s barely begun. The stock market just got a little ahead of its skis bc all the return chasing tourists came in and put on way too much leverage. And then incomes a shock, kinda doesn’t matter what it is, AI ROI, midterms, sunspot, and boom. x.com

AlvaChallengesHe attributes the sell-off to leveraged momentum positions being hit after becoming overextended and expects the market to recover, weakening the view that this decline necessarily reflects a sustained deterioration in the fundamentals of AI expansion.

Walter Bloomberg

6 Nov, 00:20

Financial news account covering global markets, economic data and geopolitics

UBS estimates 30% of planned US data-center capacity additions in 2028 could be at risk from construction pauses following Democrats’ midterm victory. x.com

AlvaSupportsThe projected pause in construction after the election could put 30% of the new data center capacity planned in the U.S. for 2028 at risk, supporting the view that policy headwinds could materially lower expectations for AI expansion.

SemiAnalysis

5 Nov, 18:36

Independent Semiconductor and AI Research Firm

Advantest and Teradyne both reported 3Q26 this week. We believe the two calls say the same thing: the ATE TAM is growing on AI compute, and supply, not demand, is the constraint through 2027. x.com

AlvaChallengesBased on earnings calls from Advantest and Teradyne, it concludes that AI computing is driving expansion in the test equipment market and that supply-side constraints will persist through 2027, weakening the view that deteriorating demand has spread broadly across semiconductor equipment.

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