🎙️ podcast Analysis February 27, 2026 The Meb Faber Show

Magnificent Seven: AI CapEx Overinvestment Creates Inevitable Correction

Software Semiconductors Internet Content
Tickers
1 Pick
Conviction HIGH
Risk Profile 1.7/10 (LOW RISK)
Horizon 12-24 months
Signal Snapshot Core Theme: Technology / AI Infrastructure

AI infrastructure spending drives future growth

Winner-take-all market supports massive CapEx

CapEx writeoffs; Private credit stress; Market correction

Executive Summary

Damodaran sold his remaining NVIDIA position in 2025 after holding since 2018, citing that 'the bulk of the AI architecture wave is already written.' His exit from Tesla was driven by the company becoming a 'political investment' where car purchases depend on political alignment. The professor identifies a critical structural problem: Big Tech collectively spending hundreds of billions on AI infrastructure while each CEO believes they'll be the winner in what will likely be a 'winner-take-all' m...

Key Investment Opportunity

Contrarian Software Positioning

Traditional software companies adapting to AI disruption rather than denying it offer asymmetric upside as market prices in worst-case scenarios

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