Authored by Lance Roberts via RealInvestmentAdvice.com,
While the AI bears focus on concentration and circular financing, the last tech overbuild was financed with debt, and this one is being paid for in cash.
Before I discuss why I disagree with the “AI bears,” I want to state that I respect their opinions, have evaluated their concerns, and have simply derived a different set of conclusions. That is an important statement, because this particular group of “AI bears” includes some of the sharpest risk minds in the business, and they have been early to almost every warning that later mattered.
When people this good line up on one side of a trade, you go back and check your own work. That’s what I did, and this article is where I landed. As always, the reason I publish these articles is for accountability later, for you and our clients.
While this group of AI bears may indeed be right about the excess, they could still be potentially wrong about the trade. I care about the latter, and those are two different claims that the market keeps confusing.
The Bear Case Deserves A Hearing
Let’s start with the person I admire the most in the AI bear camp: Fred Hickey. Fred has run The High-Tech Strategist since 1987 and has made the cleanest version of the argument. He compares today’s datacenter mania to the fiber-optic overbuild that
