DontKnow

Besides the stronger dollar and rising 10 year Treasury yields compressing valuations for software and neocloud names, there may be another reason. $nbis $crwv $IGV The report below makes the argument pretty clearly. The core issue is simple: data center spending has become too capital intensive. Seaport Research analyst Jay Goldberg believes the circular investment structure between semiconductor companies and AI infrastructure providers is making Nvidia's outlook increasingly uncertain. He maintains a Sell rating on Nvidia, arguing that concerns around its financial position are growing. According to Goldberg, the circular investment relationship between Nvidia and AI infrastructure companies has been highlighted before. Now Broadcom AVGO also appears to be part of this loop, raising concerns about whether the model is sustainable. His warning is straightforward. Building AI data center infrastructure requires enormous capital expenditures, while many of the companies expanding that infrastructure are unable to generate sufficient funding on their own.

Chinese AI model maker Zhipu is considering raising several billion dollars in Hong Kong as soon as next month, per Bloomberg. Six-month IPO lockup expires July 8. Zhipu raised $558M in its January Hong Kong IPO at HK$116.20/share. The stock traded as high as HK$2,980 this week, giving the company a market value above HK$1T, or ~$128B. The company also aims to issue shares in Shanghai to fund AI model development. Bloomberg says talks are ongoing and may not lead to a deal, with concerns still around profitability and competition against rivals like Anthropic.

CALLING THIS CAP TILL PROVEN OTHERWISE