The Joseph Carlson Show Why Everyone Is Selling Big Tech
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Feb 7, 2025 Tech giants are facing a sell-off as investors react to increasing capital expenditures and financial reports from firms like Microsoft and Google. The competition in the cloud market heats up, with strategic moves from Amazon and Microsoft regarding AI infrastructure. Bill Ackman makes waves with his investment in Uber, sparking discussions about the ride-hailing giant's growth potential amid challenges in autonomous vehicle technology. Meanwhile, Expedia's strong performance raises questions about its implications for rivals like Booking Holdings.
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Big Tech Sell-Off
- Investors sold big tech stocks due to increased capital expenditures, primarily for AI infrastructure.
- They worry about lower short-term free cash flow and long-term returns.
Public Cloud Dominance
- The public cloud's growth has shifted to an AI story, with Microsoft, Google, and Amazon dominating the market.
- Amazon was first to recognize the potential of IT as a service, followed by Microsoft and Google.
CapEx and ROI
- The key question is not the amount of CapEx spent, but the return on investment.
- High returns justify reinvestment, while low returns destroy shareholder value.