1. Operating cash flow increased 29% for Google, Microsoft, Amazon, and Meta---despite enormous capital investment
2. The latest quarterly earnings reports demonstrates this investment is already paying off
3. Capital expenditure always happens before returns
4. Borrowing usually *doesn't* present a financial crisis
5. Not investing now could be dangerous---especially if you're Google and Search is threatened
But most important is this reality: Oracle and Google's revenues have dramatically increased. Microsoft and Amazon are likewise impressive too.
Meta's not so much---so if current trends hold, they are likely to be the loser.
Of course, the bull case doesn't cancel out the bear case either...
This is the bear case against AI.
As AI infrastructure has grown, free cash flow has fallen.
Big Tech has spent $1.6T on capex over the past three years.
Meanwhile cash flow has cratered to an all-time-record of -$26.4B.
Hence why the stock market has had such a big correction recently.
https://finance.yahoo.com/markets/article/why-investors-are-dumping-tech-stocks-in-one-image-123636288.html
