Goldman Sachs: Record Institutional Sell-off of Tech Stocks, AI Trading Shifts to Realizing Revenue

Goldman Sachs' prime brokerage business saw the largest-ever sell-off of tech stocks last week. The market's strategy of "going long on AI and shorting everything else" is unraveling, as investors demand that AI companies prove their massive capital expenditures can translate into actual revenue. The market expects AI capital expenditures to reach $1.1 trillion next year, but high spending alone is insufficient to support valuations; cloud service providers need to demonstrate that orders convert into revenue and improve free cash flow. At the same time, AI infrastructure faces real constraints, with a projected power shortfall of 40 to 50 gigawatts next year, putting financial pressure on highly leveraged cloud service providers. Privorotsky believes the world is shifting from "over-saving" to "over-spending," with AI investments and government fiscal deficits driving up capital costs and weakening market risk appetite. Investors are concerned about insufficient computing power supply and future overcapacity, as AI trading faces dual challenges of monetization capability and investment returns. Despite rising short-term risks, spot computing power prices continue to climb, and demand remains strong; some heavily sold electrification, civil aerospace, and transportation assets are beginning to show investment value.

This content is provided for general informational purposes only and doesn't constitute financial, investment, legal, or tax advice. Any events, rewards, online promotions, or related information mentioned herein should not be considered a recommendation, solicitation, or invitation to purchase, sell, trade, or otherwise deal in any crypto assets. Crypto assets are highly volatile and may result in loss. The availability of WEEX services, products, and related events may vary by region. You are responsible for ensuring that your participation is in accordance with applicable local laws and regulations.