Goldman Sachs: AI capex imbalance to last until 2028

The article highlights that the second-quarter earnings season gave a taste of what's to come. Alphabet's Q2 capex came in at $44.9 billion, slightly above forecasts. Tesla's stock was hammered this past earnings season on spending concerns. The key takeaway is that investors should expect these eye-popping numbers for several years. Goldman Sachs' Eric Sheridan notes that memory and chip prices are higher than six or twelve months ago, and input costs are all rising. There's also a rush to acquire land and build data center shells ahead of component availability. The 'gazillion-dollar question' is whether this aggressive spending is already priced into Big Tech stock prices. Many companies, like Tesla, saw their shares fall this earnings season, suggesting investor skepticism. However, the article suggests this is just the beginning of a long cycle of heavy investment in AI infrastructure.