People are discovering that capex from some of the most profitable companies in history can actually be profitable 🙄
$META (Meta Platforms Inc) is flying today after reports that the company may start selling excess AI computing capacity through a cloud business.
And this is exactly the point many investors have been missing.
For months, the market looked at AI capex and said: “too expensive”, “too much spending”, “where is the return?”
Fair questions.
But when a company like Meta spends aggressively on data centers, GPUs, and AI infrastructure, that isn’t automatically money disappearing into a black hole.
It can become productive infrastructure.
First, it improves the core business: better ads, better recommendations, better engagement, better automation.
Second, it creates optionality: if Meta builds more capacity than it needs internally, it may be able to sell part of that capacity to other companies.
It's a very different story. It’s the difference between “they are burning cash” and “they are building an asset.”
This is also why I still see an interesting opportunity in $MSFT (Microsoft)
Microsoft is already much further ahead here. Azure is one of the strongest cloud platforms in the world, AI demand remains very strong, and the company is still extremely profitable despite the heavy investment cycle.
The market is worried about AI capex.
I think the better question is: who has the balance sheet, distribution, customers, and margins to turn that capex into future cash flow?
Meta and Microsoft are both on that short list (and on my portfolio).
Of course, not every AI investment will work. Some companies will overspend. Some will destroy capital.
But with the best companies, capex can be like planting trees.
At first, all you see is the cost.
Later, you may realize they were planting an entire forest.... Show More
Not investment advice. The author may have financial interests in the mentioned instruments.
I agree, those invenstments are not expenses, they are new income sources, AI is an important part of the furure beside the possible bubble so many companies will need Data center to run them... Show More
Hey, will be great to catch up with you in person at the pro investors meet in Cyprus this November if you’re going. ... Show More
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