1. Introduction: “Why Has the Nasdaq Lost Its Spark?”
Lately, Western-market investors (Seohak-gaemi) are sighing as they watch the U.S. stock market. The Nasdaq and major growth stocks—the once-dominant engines of the market—are idling in neutral. In a striking contrast, the Dow Jones, long dismissed as “boring,” is hitting record highs.
Recent weekly returns tell the story: while the Dow climbed 2%, the Nasdaq retreated by the same margin. Behind this irony of growth stocks dragging down the market lies a massive theme: Record-breaking Capital Expenditure (CAPEX) declarations. The market is now coldly weighing whether the astronomical sums of cash being “dumped” by Big Tech will be a short-term poison or a definitive investment to secure the future.
2. [Takeout 1] “The Brakes Are Off” – Big Tech’s Massive Cash Deployment
In recent earnings calls, the “Big 4″—Amazon, Alphabet, Meta, and Microsoft—defied market expectations by announcing massive hikes in AI spending. This has transcended simple investment; it has become an “infinite chicken game” where the brakes have been intentionally removed to seize market dominance.
- Overwhelming Investment Figures: Amazon announced a 60% increase, dwarfing the market’s 17% estimate. Alphabet (Google) revealed plans to nearly double its investment, up 97% from last year.
- Spending Outpaces Growth: The annual AI investment from the Big 4 is projected to grow roughly 70% year-over-year—a pace that even the robust revenue growth of Big Tech struggles to match. Consequently, Microsoft has retreated nearly 30% from its peak, and Amazon faces price corrections amid fears of negative cash flow this year.
- The Logic of Justification: Despite the costs, the data justifies the aggression. Alphabet reports that since integrating the AI model Gemini, user dwell time has tripled, and improved ad accuracy is already bolstering profitability.
“The current landscape mirrors the early 2010s when Amazon first began investing in AWS (Cloud). To ensure future monetization, aggressive investment is required now, regardless of the immediate cost.” — Amazon CEO
3. [Takeout 2] Where Is the Money Flowing? – The “Real” Infrastructure Winners
While Big Tech engages in this war of attrition, their astronomical spending is creating a massive “trickle-down” effect for infrastructure providers. Big Tech might be bleeding cash, but the “real” winners—the ones absorbing those billions—are thriving.
- Semiconductor Testing & Memory: Teradyne, once known primarily as a robotics firm, hit new highs thanks to unexpected momentum in High Bandwidth Memory (HBM) testing equipment. Storage giants like Western Digital (SanDisk) are also dominating the S&P 500 leaderboard.
- Power Infrastructure: As data centers face severe power shortages, Bloom Energy has emerged as a frontrunner. Unlike traditional grids that take years to build, Bloom’s competitive edge lies in its ability to deploy immediate power within 90 days, leading to an explosion in their order backlog.
- Optical Communications & Cooling: Corning, armed with next-gen technology to replace copper cables, recently proved the explosive demand for fiber optics through a massive contract with Meta. Similarly, Johnson Controls has posted earnings surprises, rebranding itself as a premier “AI cooling” play.
4. [Takeout 3] The “SaaS-pocalypse” – Shadows of a Software Doomsday
While infrastructure players celebrate, traditional Software-as-a-Service (SaaS) companies are facing an existential dread dubbed the “SaaS-pocalypse.” The fear is that powerful AI agents, like those from Anthropic, will eventually cannibalize the existing software market.
- A Zone of Irrational Fear: Panic selling has seen Adobe drop 60% from its peak, while Salesforce and others have undergone 30–50% corrections. Even Palantir, despite stellar performance, saw its CEO explicitly emphasize, “We are not a mere SaaS company,” to avoid being sold off with the rest of the sector.
- History Repeats Itself: This mirrors the “Death by Amazon” panic of 2012, when many feared the e-commerce giant would annihilate all brick-and-mortar retail. While many on that list did vanish, those who adapted—like Walmart and Costco—returned stronger than ever. The software market has entered a cold period of selection: distinguishing survivors from the obsolete.
5. [Takeout 4] The Great Portfolio Migration – “Non-US” and the Return of Energy
The capital map, once heavily skewed toward Big Tech, is being redrawn. Strategists are pivoting toward alternatives to overpriced U.S. tech.
- Diversification into “Non-US” Markets: South Korea and Taiwan (Semiconductors), as direct beneficiaries of AI infrastructure, and resource-rich nations like Brazil and Mexico (Commodities & Energy), are becoming core targets for portfolio rebalancing.
- The Return of Energy and Heavy Equipment: Strong oil prices and specific catalysts, such as new mining licenses in Venezuela, have allowed energy giants like ExxonMobil and Chevron to break through technical resistance. Meanwhile, the data center construction boom has pushed heavy equipment leaders like Caterpillar to consistent new highs.
6. Conclusion: “A Shift in the Investment Cycle—Are You Prepared?”
The current market is not a simple downturn. We have entered Gartner’s “Trough of Disillusionment” for AI. The era of “blind investment” is over; we have entered a phase that demands the discernment to identify companies that are actually generating cash.
This is an inevitable transition from the “Infrastructure Build-out” phase to the “Service Monetization” phase. Rather than reacting to the short-term volatility caused by Big Tech’s massive spending, the winning strategy is to occupy the vantage points where that capital is flowing.
The Final Question: “Big Tech is unleashing a historic wave of capital. Is your portfolio positioned in the path of this massive trickle-down effect?”
“I do not recommend buying or selling any stocks. My intention is simply to study together and share the trading strategies I personally consider. Please trade according to your own style, and as you continue your own research, I would appreciate it if you could also share any differing perspectives you may have. I hope we can grow together.”
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