The Julia La Roche Show · Tuesday, July 14, 2026
Larry McDonald argues that current capital expenditure in artificial intelligence, particularly for data centers, is unsustainable and represents 'mal-investment.' He notes that $2 trillion has left the Mag7 stocks since October, indicating a potential pullback in this sector.
“And then above all, this data center, can data center capex, you know, Mark Zuckerberg has the testosterone in his veins right now, he's literally choose up, you know, he's got to choose up.”
“And so, you know, that is if the economy slows down a little bit and advertising spending at Facebook and, you know, Instagram, you know, slows down a little bit, not to mention the fact that the rate of change of the capital expenditures in artificial intelligence are totally unsustainable.”
“You can see that in the Mag7, two trillion dollars has left the Mag7 since October. And, you know, that was our bearish call on your show. Is that the Mag7 is really underperforming because the beast in the market, that serpent in the market, is is kind of a veto power right now.”
“You're spending too much on capital expenditures. It's outrageous. Your free cash flow is being destroyed.”