Clode: We’re early in this generational tech, not near an investment peak

Cloud Performance & Expectations - Microsoft's cloud growth is estimated at 34% year-over-year, with market watching if this meets investor expectations, especially after Alphabet's strong cloud performance [1] - The market anticipates further acceleration and strength in cloud, driven by easing Blackwell supply and significant rack installations by hyperscalers, potentially boosting cloud backlog in the second half [2] - Amazon is expected to demonstrate cloud acceleration, following Alphabet's lead in raising capex forecasts significantly above analyst expectations [3] Capex & AI Investment - Meta is expected to continue investing heavily in AI and data centers, despite prior efficiency initiatives, with the market anticipating a significant increase in their capex forecast [4] - The industry expects continued positive comments on capital spending, driven by increasing use cases, as evidenced by Alphabet processing 980 trillion tokens, up from 480 trillion a couple of months ago [5] - The industry acknowledges potential overinvestment in AI, with mixed signals regarding infrastructure growth, as highlighted by ASML's uncertain growth outlook [6][7] Market Dynamics & Confidence - Tax reform, allowing up to 100% expensing of capex and R&D, is expected to benefit companies' free cash flow, boosting confidence in capital spending [8] - Ongoing AI infrastructure investments by companies like Anthropic, Open AI, and XAI are expected to further fuel capital spending [9] - Despite potential market rebound and strong positioning in stocks like Meta and Microsoft, the industry believes it is still early in the innovation curve of AI technology [11] - The current situation is compared to the early stages of the internet, suggesting that the capex cycle is far from ending due to the generational nature of the technology [12]