US AI Equities Enter Late Cycle, Capital Expenditure Surges

HTX Research has published a report examining U.S. AI equities and their respective cycles.

The report argues that while technological diffusion in the AI industry is still in its early stages, capital expenditure, valuations, and investor sentiment have moved well ahead of it.

According to J.P. Morgan Asset Management, five U.S. hyperscalers will spend approximately $697 billion in 2026, with capital expenditure rising from roughly 33% of their operating cash flow in 2023 to an estimated 93%.

The report views Alphabet as offering the most compelling overall asymmetry at current prices and cycle positions, and applies a similar framework across Microsoft, Meta, TSMC, NVIDIA, Amazon, Oracle, Micron, AMD, Arista, and Vertiv.