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AI is the CapEx Cycle Now (and maybe it's paying off)

AI is the CapEx Cycle Now (and maybe it's paying off)

Charts on AI CapEx and improved margins we were promised

Moses Sternstein's avatar
Moses Sternstein
Jul 17, 2025
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AI is the CapEx Cycle Now (and maybe it's paying off)
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  • has AI’s economic contribution peaked? it’s already doing a lot (hardware-wise)

  • pe-backed companies deliver at the margins


👉👉👉Reminder to sign up for the Weekly Recap only, if daily emails is too much. Find me on twitter, for more fun. 

Just very briefly, as we head into earnings season.

AI is the CapEx Cycle Now (reprise, ad infinitum)

It’s broadly true that we’re a healthcare-driven economy, but it’s only broadly true. There are exceptions.

AI, for example, if you haven’t heard of it—that’s a driver, for sure. Or more specifically, the driver is the extraordinary amount of money that big enterprises are pouring into the hardware that makes AI possible.

Consider the following plot of hardware shipments and order backlogs:

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