"Zoom out: This mirrors a broader skepticism around how AI companies are approaching their balance sheets. Meta stock is still down 14% since it reported earnings. While the firm reported record revenue, it also teased increased spending plans. Meta, Oracle and Alphabet have all issued debt recently, presumably as a means of funding their AI capital expenditure ambitions, which alongside Amazon are projected to swell to over $450 billion this year."
"Reality check: AI evangelists on Wall Street are also skeptical that standard metrics, such as valuations, are the best way to analyze these companies. "I don't pay attention to valuations that much," Jack Janasiewicz, portfolio manager at Natixis Investment Managers, tells Axios, adding that he sees the metric as subjective. Zoom in: Valuations, for example, would not take into account OpenAI entering multibillion-dollar partnerships with other tech players."
Sam Altman offered to find buyers for shares after being asked about $13 billion in revenue versus $1.4 trillion in planned expenditures. Alex Karp dismissed Michael Burry's Palantir short as "bats-t crazy." Rishi Jaluria said it is fair to question current valuations and reported more investor queries about funding AI infrastructure. Meta remains down 14% since earnings despite record revenue and plans for increased spending. Meta, Oracle and Alphabet have issued debt to fund AI capital expenditures, which with Amazon are projected to exceed $450 billion this year. Some Wall Street investors view valuations as subjective and point to multibillion-dollar partnerships that reduce conventional failure risk.
Read at Axios
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