Drawing lessons from history, is this wave of AI capital expenditure a boom or a bubble?

Deutsche Bank believes that historically, capital expenditure booms often end in collapse. The key factor that distinguishes prosperity from recession is the level of leverage (debt) involved. Historical experience shows that credit-intensive capital expenditure booms often lead to more severe recessions. Considering the current AI spending boom, which is primarily funded by the profits of large Technology companies in the USA rather than debt, this somewhat reduces systemic risk. However, the ratio of USA household net Assets to disposable income is at a historical high, and the concentration of the stock market has also hit a new high, which increases the systemic risk brought about by the transmission of wealth effects.

wallstreetcnFeb 28 05:03 ET

Morgan Stanley: Generative AI is expected to achieve positive returns this year, with revenue likely to exceed one trillion dollars by 2028.

Morgan Stanley indicates that 2025 may see the ROI critical point, with a gross margin of 34% marking the Industry's formal crossing of the break-even line; by 2028, the total revenue from generative AI is expected to approach 1.1 trillion dollars, with the ROI likely improving to around 67%, and several Technology giants like Amazon and Meta are expected to benefit from the AI wave.

wallstreetcnFeb 25 08:21 ET

Is NVent Electric Plc (NYSE:NVT) Worth US$62.6 Based On Its Intrinsic Value?

Simply Wall StFeb 24 07:28 ET

Express News | Shares of Companies in the Broader Industrial Sector Are Trading Lower Amid Overall Market Weakness on US Consumer and Economic Concerns

BenzingaFeb 21 15:41 ET

nVent Electric | 10-K: FY2024 Annual Report

SECFeb 18 17:21 ET · Announcements

Unusual Options Activity: PLTR, AEP and Others Attract Market Bets, PLTR V/OI Ratio Reaches 499.7

Moomoo NewsFeb 18 11:30 ET