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00:00 Speaker A
Does this big tech AI spending spree just continue at this pa at this pace, Matt? Just month after month, quarter after quarter, just, you know, up and to the right?
00:21 Matt
That’s a good question. You know, I think shakeouts like this probably cause a lot of investors to kind of revisit that exact question. Um, and right now, you know, you’re not seeing any kind of signs that’s slowing down despite the volatility in the equity space. Now, one thing I do want to make clear is that this spending is becoming kind of more capital market market sensitive, meaning that, you know, the financing of this buildout is not just reliant on operating cash flows, but it’s coming from the capital markets, things like that Amazon bond sale or the equity issuance from Google as an example. And so, you know, capital market conditions are going to matter a little bit more to that. But as we as we’ve seen so far this year, that really hasn’t impacted planning into 2026 and 2027 and so far. Um I would just say that in terms of the volatility that we’ve seen the last few days, this is really I think more of a positioning shakeout than something changing the underlying momentum uh of the build out that’s been taking place the last couple of years.
01:23 Speaker A
So do you think Matt when big tech does report earnings in just a couple of weeks here, you think yes, they’re going to tell, they’re going to tell us we’re going to keep raising our AI capex plans and if so Matt, what does that mean downstream for names like an Nvidia?
01:55 Matt
Yeah, it’s a good question. I don’t think that we’ll see a whole lot of updates to 2026 uh except for the potential for uh some modest increases due to the increase of memory costs. Um, but you know, we’ve already established the budgets uh for the most part for 2026 and they’ve been raised a little bit throughout this year. I don’t think that they’re likely to be raised significantly beyond this given that we’re already halfway through the year. Uh but I think the major question mark is indications about what spending intentions are in 2027. Um, there has been, you know, some language that executives have given about, you know, significant increases again in 2027, but you know, we it will take some time and capital markets are going to dictate, um, you know, how how much that’s going to continue in 2027 given that you’re more reliant on the debt and the equity markets to finance that build out.