XPost: alt.politics.economics, alt.politics.republicans, or.politics   
   XPost: sac.politics   
   From: ai@total.scam   
      
   The stock market turmoil unleashed by the artificial-intelligence   
   industry reflects two fears that are increasingly at odds.   
      
   One is that AI is poised to disrupt entire segments of the economy so   
   dramatically that investors are dumping the stocks of any company seen   
   at the slightest risk of being displaced by the technology.   
      
   The other is a deep skepticism that the hundreds of billions of dollars   
   that tech giants like Amazon.com Inc., Meta Platforms Inc., Microsoft   
   Corp. and Alphabet Inc. are pouring into AI every year will deliver big   
   payoffs anytime soon.   
      
   The dueling anxieties have been brewing for months. But they’ve shifted   
   to the center of the stock market over the past two weeks. The result   
   has been a series of punishing selloffs that have hammered dozens of   
   companies across a number of industries — from real estate services and   
   wealth management, to insurance brokers and logistics firms — and wiped   
   more than $1 trillion from the market values of the big tech companies   
   investing the most in AI.   
      
   “There is a contradiction when it comes to what investors are worried   
   about when it comes to AI,” Julia Wang, the north Asia chief investment   
   officer at Nomura International Wealth Management, told Bloomberg   
   Television. “Those two things can’t be true at the same time.”   
      
   The shift marks a major break from the sentiment of the last few years,   
   when speculation that AI would set off a transformative productivity   
   boom kept pushing stock prices higher. While big tech stocks kept rising   
   — sending Meta surging nearly 450% from the end of 2022 until the start   
   of this year, and Alphabet up more than 250% — the hand-wringing over   
   whether it was a bubble about to burst did little to derail the rally.   
      
   That began to change late last month as earnings reports from some of   
   the biggest tech companies started to spook investors, who are growing   
   impatient that the spending has yet to produce a commensurate windfall   
   in revenues.   
      
   Microsoft, Amazon, Meta, and Alphabet alone are expected to spend more   
   than $600 billion on capital expenditures in 2026. That’s hoovering up   
   free cash flows and loading the companies with depreciating assets,   
   radically altering many of the characteristics that have helped fuel the   
   firms’ rise over the past decade.   
      
   “This is a real no-win situation,” said Anthony Saglimbene, chief market   
   strategist at Amerprise Advisor Services. “Investors were comfortable   
   saying, ‘so long as it happens in the future, I’m comfortable with   
   Microsoft or Amazon or Alphabet spending the money.’ Now they want to   
   know more immediately when the payback will come — and we don’t have a   
   clear picture.”   
      
   Since Microsoft and Meta kicked off the fourth-quarter earnings season   
   on Jan. 28, Microsoft and Amazon shares have each dropped more than 16%,   
   with Amazon mired in its longest losing streak in about 20 years.   
      
   Even Alphabet, which is widely regarded as the biggest AI winner in the   
   group, is down 11% off a recent peak. Meta, whose strong revenue growth   
   overshadowed higher-than-expected capital spending, has fallen 13% since   
   an earnings-fueled rally. In total, nearly $1.5 trillion in combined   
   market value has been wiped out from the group, pushing the tech-heavy   
   Nasdaq 100 Index into negative territory for the year.   
      
   At the same time, investors are growing increasingly worried about the   
   businesses that will potentially be swept aside — or at least   
   significantly upended — by the new applications that are being steadily   
   rolled out.   
      
   That has caused a series of stock market selloffs that have flared   
   repeatedly and hit private-credit firms, video-game makers and software   
   companies, among others.   
      
   The latest bout began after Anthropic PBC released productivity tools   
   for lawyers and financial researchers, hammering the stock price of   
   companies across those industries. Insurance brokers tumbled on another   
   program tied to OpenAI. One from a little-known startup, Altruist Corp.,   
   battered wealth-managers like Charles Schwab Corp. and Raymond James   
   Financial Inc. Even a press release from a former karaoke company with   
   less than $2 million in quarterly revenue sent the stocks of logistics   
   companies tumbling.   
      
   The market has seen previous AI-related routs that were later reversed,   
   such as the one set off by the Chinese company DeepSeek early last year.   
   And to many, the frantic selling looks like another overreaction —   
   especially since AI, rather than displacing entire companies may very   
   well wind up making them more profitable instead.   
      
   “Just because the exuberance of the past few years has been taken down,   
   people are now acting irrationally, thinking AI has become a headwind to   
   the economy,” said Bobby Ocampo, the co-founder and managing partner of   
   Blueprint Equity.   
      
   However, he added, the underlying concerns are legitimate. “There are a   
   lot of AI-first companies trading very aggressively, but it is still   
   very much a landgrab. People are starting to realize they’re not meant   
   to be super efficient or profitable in the near term.”   
      
   The spending spree has, of course, already been a boon to the companies   
   that are on the receiving end of it, like Nvidia Corp. and memory   
   chipmaker Micron Technology Inc. The shares of both soared over the past   
   three years as sales surged.   
      
   But the pile of money the tech giants are throwing at AI is getting so   
   big that there’s increasing skepticism about whether it can continue.   
      
   On Tuesday, UBS Group AG cut its recommendation on technology stocks   
   from attractive to neutral, citing still lofty valuations and   
   expectations that the recent pace of capital spending by big tech   
   companies — often referred to as hyperscalers — is unsustainable.   
      
   “This level of capex will consume almost 100% of hyperscalers’ cash flow   
   from operations compared with a 10-year average of 40%,” Ulrike   
   Hoffmann-Burchardi, chief investment officer Americas at UBS Wealth   
   Management, wrote in a note to clients. “That spending is now   
   increasingly being funded by external debt or equity financing.”   
      
   At the same time, some are dubious of the fears that have rocked the   
   market over the past few weeks. After all, given the relatively slow   
   commercial adoption of AI, the way it will reshape business more broadly   
   remains a subject of debate.   
      
   “It might take a lot for the market to snap out of the doom loop and   
   realize fundamentals are strong, the companies building AI will benefit,   
   and that more companies can benefit by growing revenue and so forth with   
   AI,” said Ameriprise’s Saglimbene.   
      
   “When the market finally feels these companies aren’t going out of   
   business, it will realize AI is a tool that can lead to greater   
   profitability, and that the companies that deploy it will gain. But   
   we’re going to be in a period of volatility for the foreseeable future.”   
      
   https://www.ocregister.com/2026/02/16/a-stock-market-doom-loop-is-hitting   
   -everything-that-touches-ai/   
      
   --- SoupGate-Win32 v1.05   
    * Origin: you cannot sedate... all the things you hate (1:229/2)