🐺 Are We Spending Too Much on AI?

Before we dive in, here’s what stood out today: volatility is back, the first big bank earnings are in, and speculative names are running hot again.

Before we dive in, here’s what stood out today: Meta doubles down on data centers, Netflix preps for earnings, and crypto is hanging on to critical technical levels.

Meta’s $27B Datacenter Bet… but are We Overspending?

Meta and Blue Owl just announced a $27B joint venture to build the Hyperion data center campus in Louisiana, one of the largest AI infrastructure financings ever. Blue Owl will own roughly 80%, with Meta holding 20%… a structure that lets Meta push forward on its $60-72B 2025 CapEx plan without overloading its balance sheet.

But it raises a bigger question: are we overspending on data center expansion? The market seems to think so… hot datacenter names like $NBIS, $IREN, and $CIFR have all sold off sharply over the past week as investors worry about CapEx saturation and delayed ROI.

But let’s address the energy concern. All this compute requires massive power, and many are looking toward nuclear. The LeverageShares Thematic ETF $URAN is up 64% YTD! You can check out their prospectus here.

Netflix Reports Earnings!

Netflix $NFLX reported 17.2% YoY revenue growth to $11.5B, but EPS missed expectations due to a $619M tax hit in Brazil. Operating margin contracted to 28.2% from 29.6%, yet management stayed upbeat, highlighting record ad sales.

Latin America was a standout, with $1.3B in revenue, up 10.5% YoY, showing the region’s digital tailwind continues. But with shares trading at a forward P/E above 50 and slipping below both the 20MA and 50MA, valuation risk remains. Strong growth, but limited room for error.

Bitcoin Retests Key Support

Bitcoin $BTC retested last weekend’s low at $108.4K, with the 200MA at $107.9K… a critical zone to watch. A break below would signal more downside, while a clean hold could mark another higher low in the ongoing consolidation.

Ethereum $ETH has slipped back below $4,000, currently around $3,870. The trend remains constructive as long as BTC holds that 200MA, but a breakdown could see broader de-risking across digital assets.

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Have a profitable rest of the week!

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