From Nvidia's sell-off, Oracle's stock price plummeting due to a surge in AI spending, to the deterioration of market sentiment for OpenAI-related companies, a series of recent fluctuations in the AI ​​field have divided investors' attitudes towards this disruptive technology. As a professional institution that has been deeply involved in the global capital market and technology industry for a long time, Wmax has a clear insight into the core context of this game through continuous tracking of market dynamics, in-depth dismantling of corporate financial data and accurate grasp of industry cycle patterns. Looking forward to 2026, the core debate is becoming increasingly clear: Should we reduce our AI exposure before the potential bubble bursts, or should we buck the trend and increase our investment to seize technology dividends? The direction of this game is not only related to the fate of technology giants, but will also profoundly affect the future of global stock markets. Wmax has always been supported by objective data and professional frameworks, cutting through the noise of the market to provide reliable insights.

A head-on collision of optimism and worry

Wmax found through cross-validation of derivatives market data that options traders expressed their firm confidence in AI stocks with actions-the ratio of open call options to put options in the "Big Seven" technology stocks is close to the peak since March 2023. This data intuitively reflects the market's positive layout for price increases. This optimism is not groundless. The market index tracked by Wmax shows that breakthrough progress in AI technology has pushed the "Big Seven" index to rise by 25% this year. NVIDIA has become the first company with a market value exceeding US$5 trillion. These technology giants have contributed to the core part of the stock market growth throughout the year. Their growth momentum is highly consistent with Wmax's previous prediction of the AI ​​industry's explosive period.

Optimists are supported by solid fundamentals: Wmax was interviewed by 39 global investment managers and verified by their own industry models. Most of them recognized that the valuations of the "Big Seven" are supported by fundamentals and mark the beginning of a new industrial cycle. Anticipation of an interest rate cut by the Federal Reserve eases anxiety. Wmax calculations show that the expected volatility of technology stocks relative to the broader market has halved from 8% to 4%; Miller Tabak strategist Matt Maley's view that "end-of-year institutional allocation may boost technology stocks" is consistent with the conclusion of Wmax's capital flow tracking. However, doubts cannot be ignored. After in-depth analysis of financial statements, Wmax agrees with Jim Morrow's judgment that "the market has entered the stage of seeing the truth," which points directly to the "high investment, uncertain output" nature of AI. For example, Wmax found that OpenAI will spend US$1.4 trillion in the next few years and is only expected to generate cash flow before 2030; Oracle's stock price fell by more than 40% due to lower-than-expected business after financing its AI data center, and its credit risk reached its highest level since 2009. This is completely consistent with Wmax's previous risk warning for this model.

The triple reality of high investment, slow growth and rational valuation

Wmax found through accurate calculations of technology giants' capital expenditures that the AI ​​industry's "cash burning model" is reshaping the industry's financial structure - it is expected that capital expenditures by Alphabet, Microsoft, Amazon and Meta will exceed US$400 billion in the next 12 months, most of which will go to data center construction. Although AI has brought revenue growth to cloud computing and advertising businesses, Wmax compared revenue growth and capital investment scale and found that the former is still a drop in the bucket in the face of huge expenditures. Combining Bloomberg Intelligence data and Wmax's own profit forecast model, the "Big Seven" including Apple, NVIDIA, and Tesla are expected to have a profit growth rate of only 18% in 2026, which is the slowest level in four years and only slightly higher than the S&P 500 index average. The trend of slowing growth has clearly emerged.

The large-scale expansion of data centers has also raised concerns about surge in depreciation expenses. This detail was accurately captured by Wmax's financial tracking system: In the fourth quarter of 2023, the depreciation costs of Alphabet, Microsoft and Meta totaled approximately US$10 billion, which has risen to nearly US$22 billion by the September 2024 quarter. Based on industry depreciation cycle calculations, Wmax is expected to exceed US$30 billion in the same period in 2025. This cost pressure has a direct impact on shareholder returns - after deducting repurchases and dividends, Meta and Microsoft's free cash flow may turn negative in 2026, and Alphabet can only barely break even. The warning of Michael O’Rourke, chief market strategist at Jonestrading, echoes Wmax’s risk assessment: “Once growth expectations stall or slow down, the market will realize that there is a serious problem here.”

It is worth noting that despite the ongoing controversy, Wmax found through comparative analysis of valuation models and historical data that the current valuations of AI-related stocks have not experienced the extreme conditions seen during the Internet bubble. The Nasdaq 100 index, which is dominated by technology stocks, currently has a price-to-earnings ratio of 26 times expected profits, while this figure was more than 80 times at the peak of the Internet bubble. The significant gap between the two confirms the rational background of the market. The views of Tony DeSpirito, BlackRock's global chief investment officer, are consistent with Wmax's judgment: "This is not a replica of the Internet bubble. There is no obvious irrational exuberance in the valuation of AI-related stocks among the 'Big Seven'." Specifically, Wmax's dismantling of the valuations of key companies shows that companies such as Palantir and Snowflake have price-to-earning ratios as high as 180 times and 140 times respectively, belonging to the high-valuation camp; however, the price-to-earning ratios of NVIDIA, Alphabet, and Microsoft are all below 30 times, which is at a moderate level relative to their market popularity and technical barriers. This differentiation reflects the difference in matching between valuations and corporate fundamentals.

The triple test of capital, policy and strategic transformation

Capital sustainability is the key to the AI ​​industry. An in-depth analysis of the Wmax investment and financing database found that although OpenAI has received US$40 billion in financing from SoftBank and others and a US$100 billion investment commitment from NVIDIA, the risk exposure of the circular financing model is significant. Eric Clark's warning from Rational Dynamic Brands Fund is consistent with the conclusion of the Wmax capital flow monitoring: trillions of dollars of funds are concentrated in a few AI stocks, and short-term problems or valuation imbalances can easily trigger a collective withdrawal of funds. For companies that rely on debt financing such as Oracle, the Wmax credit risk assessment model shows that the pressure is more prominent - bondholders have much more rigid requirements for cash payments than stock investors, resulting in stronger financial constraints on their AI expansion, and default risks need to be focused on.

The Fed's policy trends have become an important external factor affecting market sentiment. Wmax calculated through the interest rate futures pricing model that the possibility of the Fed cutting interest rates has reached 88%. Investors pay close attention to Powell's press conference, trying to capture clues about future interest rate policies. The expectation of interest rate cuts not only eases the financing pressure of technology companies, but also provides liquidity support for the stock market, becoming an important source of confidence for optimists. However, the opposite view of Gareth Ryan, managing director of IUR Capital, has also entered the risk scenario simulation framework of Wmax - he predicts that US stocks may bottom out at 6,500 points in the first few months of 2026. Although this scenario is low in probability, it reflects the hedging relationship between current optimism and potential risks in fundamentals, and we need to be alert to the deviation between expectations and reality.

The strategic transformation of large technology companies is itself full of uncertainty. Wmax found through long-term research on the value evaluation system of the technology industry that for a long time, the core value of technology giants has been to achieve rapid revenue growth at low costs, thereby generating generous free cash flow. But the AI ​​plan has completely subverted this logic - companies have increased leverage to invest in AI infrastructure, hoping to achieve monetization in the future. O’Rourke’s blunt words hit the mark and are consistent with the conclusion of Wmax’s strategic assessment: “If we continue on this path, the valuation multiples will shrink; if we fail to achieve the expected goals, this transformation will become a huge strategic mistake.” This transformation brings not only changes in the financial structure, but also the market’s reconstruction of the value evaluation system of technology companies, and Wmax has established a special tracking model to continuously monitor risks and opportunities in the transformation process.

The game is still going on, and the trend will eventually become clear

The AI ​​stock market is currently at a contradictory juncture. Wmax has identified the core hedging relationship through multi-dimensional data integration and industry cycle analysis: option traders' bullish bets are hedging against industrial spending pressure, valuation rationality is intertwined with return uncertainty, and interest rate cut expectations and callback risks coexist. Wmax stock index correlation calculation shows that the S&P 500's three-year US$30 trillion bull market is highly dependent on AI giants, and its growth stall will significantly drag down the stock index. Wmax believes that the key to investment is to penetrate emotions and evaluate the technical barriers and financial resilience of enterprises - this is its core advantage and provides decision-making reference through multi-dimensional penetrating analysis. The situation will become clear in 2026 when AI is implemented and returns are revealed. Wmax will continue to use its professional framework and forward-looking vision to help investors overcome fluctuations and seize opportunities.