Artificial intelligence (AI) has been the dominant investment theme for more than three years, dividing markets into two halves: AI winners and AI losers. One number that investors have been fixated on is burgeoning AI capex. Lately, markets have been getting increasingly apprehensive about that ever-rising number, which has drained Big Tech companies’ otherwise fat operating free cash flows, pushing them to capital markets to shore up their balance sheets.
While that number is still important — particularly for Nvidia (NVDA) investors, as much of the AI spending is landing in its coffers — there are two new data points that investors are now watching closely. The first is crude oil (CLX26) rising above $100 per barrel, while the second is the 10-year U.S. Treasury yield rising over 5%.
