Spend too much on AI and get punished. Spend too little and get punished harder. That's the week Alphabet Inc. (NASDAQ: GOOGL) and Tesla, Inc. (NASDAQ: TSLA) just had. Alphabet dropped roughly 7% on fears it's spending too much on AI infrastructure. Tesla fell even harder on fears it isn't spending enough.
Rob Spivey, director of research at Altimetry, sees that contradiction as the whole story. The market can't decide what it's angry about, which usually means it isn't thinking clearly about either company.
Why This Is Rotation, Not Retreat
Spivey's research team tracks two things when a capital expenditure (CapEx) cycle draws criticism: is there real demand behind the spending, and can the companies actually finance it? On both counts, he argues, the AI buildout still checks out. Hyperscalers have said outright that they remain capacity-constrained, not overextended.
What's actually happening, in his view, is leadership churn. Altimetry's work across three decades of market cycles found that sector leadership almost never repeats from one year to the next. Last year's leaders, communication services, tech hardware, and industrials, are giving way. Tech hardware and industrials look durable. The sector Spivey says the market is sleeping on is energy.
By Altimetry's count, roughly 65% of the U.S. market cap now ties back to AI in some form, which is why a rough week for two hyperscalers reads as a crisis to some investors. Spivey argues that reaction misreads the moment. The three best-performing sectors so far this year, by his team's tracking, have been industrials, technology hardware, and energy. He expects that lineup to hold through the back half of the year.
Oil and Gas Are Getting a Premium
Some of the recent strength in energy is tied to headlines out of Iran and the Red Sea, and Spivey doesn't dismiss that. But he frames the geopolitical premium as a layer on top of a structural story, not the story itself. The United States needs more natural gas for two reasons at once: AI data centers require both on-grid and off-grid power, and LNG exports to allies are ramping because of instability in the Gulf. On the oil side, that same geopolitical premium is pushing up the effective price floor, which makes drilling economics work for shale producers who were on the fence a year ago.
The AI Buildout's Last Mile
The logic follows the supply chain: chips first, then the power and cooling infrastructure, then, last, the fuel. Natural gas and oil sit at the end of that chain, and Spivey argues the United States holds a genuine edge there, comparable to Saudi Arabia's position in oil. That's before accounting for the geopolitical premium building into oil prices from tension in the Gulf.
Baker Hughes Company (NASDAQ: BKR) sits at the center of the oilfield equipment business, and Spivey points to a wide gap between its 5% reported return on assets and the 15% figure Altimetry calculates once accounting distortions are stripped out. The company touches LNG buildout, drilling activity, and AI data center power projects, giving it three separate paths to benefit from the same trend.
Spivey does flag some near-term volatility here, since Baker Hughes reacts to every headline out of Iran the same way oil prices do. His advice is the same he'd give on most commodity-linked names: dollar-cost into it rather than trying to time a single entry point. Even in a scenario where oil settles closer to $70 a barrel, he still sees the company as durably profitable, since natural gas pricing and LNG demand hold up independent of where crude lands.
EQT Corporation (NYSE: EQT) is the largest natural gas producer in the country, concentrated in Appalachia with reserves Spivey says could last well beyond a decade.
Its uniform return on assets runs close to double the roughly 5% average for exploration and production peers.
He isn't calling for Bloom Energy Corporation (NYSE: BE)-style triple-digit gains here.
The case is steadier: 15-20% earnings growth potential against a valuation that doesn't yet reflect it, driven by a natural gas market Spivey says is entering a genuinely new demand paradigm after two decades of flat U.S. power consumption.
Murphy Oil Corporation (NYSE: MUR) rounds out the list. It's an old-school exploration and production company with roughly half its output in oil and half in natural gas, spread across the United States, Canada, and Vietnam.
Years of disciplined bets in the Gulf of America and offshore Africa are approaching payoff: Spivey points to exploration success that could potentially double the company's reserves.
The more immediate catalyst is timing.
He expects a meaningful production ramp as early as the third quarter and more clearly by the fourth, as first oil flows from those wells, a shift the market hasn't priced in yet.
2 Names Losing Their Grip
T-Mobile US, Inc. (NASDAQ: TMUS) benefited enormously from taking broadband share from Comcast Corporation (NASDAQ: CMCSA), pitching home internet delivered over its cell network as a cheaper alternative to cable.
But Spivey's embedded-expectations analysis flags a problem: T-Mobile's return on assets currently runs about 1.5 times the level of other telecom names, and the market is still pricing in that gap holding steady, without accounting for intensifying competition. Starlink's push into home broadband is the clearest new threat, and it caps T-Mobile's room to keep raising prices as it takes share. He expects that elevated return on assets to fade as pricing normalizes and the competitive field gets more crowded.
Netflix, Inc. (NASDAQ: NFLX) has already fallen more than 40% from its highs, and Spivey argues it still isn't cheap. Before the drop, the market was pricing in a company with saturating subscriber growth but a return on assets that kept improving, alongside 15% to 20% annual growth.
After the drop, the market has simply lowered the bar: still elevated profitability, just growth in the high single to low double digits instead. That's a shift in degree, not in kind, and it still assumes Netflix holds its position against a field crowded with The Walt Disney Company (NYSE: DIS), Paramount Skydance Corporation (NASDAQ: PSKY), YouTube, and a growing wave of short-form and AI-generated content. Spivey doesn't see enough room in that setup for the dip-buying case to work, even with ad revenue and bundling as potential growth levers.
The through-line across both trades: strong prior performance priced in as permanent, with the competitive risk barely reflected at all.
Spivey and his Altimetry co-founder, Joel Litman, go deeper on this rotation, including additional names in the space, in Altimetry's free energy sector report.
Stay focused on where the demand is actually growing, because that's what will move these stocks over the next year, not which sector had the best headlines last quarter.
The article "3 Stocks Standing Out and 2 Losing Momentum as the Tech Rally Cracks" first appeared on MarketBeat.
