Bloomberg Surveillance · Thursday, July 23, 2026
The market is increasingly worried about the return on investment (ROI) for the massive capital expenditure (Capex) in AI, with Google's recent announcement of increased Capex causing concern. If these investments do not yield sufficient returns, companies might need to issue more debt, leading to a potential re-pricing of equity markets.
“So, so what the market's getting very concerned about out is all of us spend, all of us CAPPEC spend. Will it turn into a return on investment in our OI as we like to say, And that's not and that's not abundantly clear that you just if you throw more money that you get a better return, you know, in an investment.”
“And the read through on this whole thing is does this come to a does this come to a batman? In other words, in order to have the capax, you might have to issue more bonds. Therefore you become you know, more indebted as a company if you're leveraging your balance sheet in order to do that. And then if you don't get the overall return on investment, then you major repricing in the equity markets. And that's the crescendo that people are worried about right now. We're not there yet, but that would be This would be the sign.”