The DeepStack Call · Part 04 · Capex
AI Spending Has Met Its First Real Bill
SkepticalProve the return
Capital intensity is not a moat. Every new AI dollar now has to out-earn its financing cost.
ConvictionHigh
What to do with this
- Screen hyperscalers on free cash flow after capex; Alphabet’s −$6 billion quarter is the new benchmark.
- Reward budgets that arrive with return data, not budgets that only grow.
- Watch the labs’ growth rates: deceleration, not decline, is the trigger.
Next test · Jan 1, 2027Alphabet discloses its higher 2027 budget; a rise in the stock revives the defense case, another fall validates the return test.