Dan Ives of Wedbush Securities has a specific name for what is happening to tech stocks right now. In a note published June 26, he called it a "Twilight Zone market," Seeking Alpha reported, and the phrase is more specific than it sounds.
Microsoft (MSFT), Nvidia (NVDA), Meta Platforms (META), and Palantir (PLTR) have all sold off sharply in recent weeks. At the same time, Micron Technology (MU), which supplies memory chips to the AI infrastructure those same companies are building, just reported blowout earnings and hit fresh highs.
Ives thinks investors have run out of patience at a specific moment in a much longer cycle. The AI story, in his reading, is still intact.
Wedbush's note traced the disconnect to two specific concerns, Benzinga reported. The first is the lag between Big Tech's massive capital spending and any visible payoff in revenue. Microsoft and Meta, in particular, are in a six- to 12-month window where data center and compute buildouts are scaling up, but the monetization wave investors are waiting for has not yet arrived.
Ives put it directly in the note. "We are in an 'air pocket stage' right now where the $700 billion of Big Tech cap-ex this year is fueling the AI buildout… and tech investors are growing increasingly frustrated by the patience needed around Microsoft and Meta in particular seeing the fruits of their labor," Benzinga reported.
Microsoft (MSFT), Nvidia (NVDA), Meta Platforms (META), and Palantir (PLTR) have all sold off sharply in recent weeks. At the same time, Micron Technology (MU), which supplies memory chips to the AI infrastructure those same companies are building, just reported blowout earnings and hit fresh highs.
Ives thinks investors have run out of patience at a specific moment in a much longer cycle. The AI story, in his reading, is still intact.
Wedbush's note traced the disconnect to two specific concerns, Benzinga reported. The first is the lag between Big Tech's massive capital spending and any visible payoff in revenue. Microsoft and Meta, in particular, are in a six- to 12-month window where data center and compute buildouts are scaling up, but the monetization wave investors are waiting for has not yet arrived.
Ives put it directly in the note. "We are in an 'air pocket stage' right now where the $700 billion of Big Tech cap-ex this year is fueling the AI buildout… and tech investors are growing increasingly frustrated by the patience needed around Microsoft and Meta in particular seeing the fruits of their labor," Benzinga reported.
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