Michael Burry highlights a negative correlation between Big Tech AI capex and stock performance, with Apple as the sole exception.
Michael Burry suggested that heavy AI-related capital expenditures by Big Tech firms are dragging down the S&P 500. Charts shared in his post show a negative correlation between forward capex estimates and stock performance for major tech companies.
Five of the Magnificent Seven—Nvidia, Microsoft, Amazon, Alphabet, and Meta—have seen valuations fall below their 10-year averages as of July 24. Apple, with lower AI spending, remains the outlier, outperforming peers in the index.
The analysis, sourced from recent data, underscores growing investor concerns over the returns on AI investments amid broader market volatility.