Fidelis Capital flags AI capex squeeze as hyperscaler free cash flow declines
QQQ•AI spending pressures hyperscaler cash flow
- AI spending is pressuring hyperscaler free cash flow, with capex rising while FCF falls across the past six quarters.
- The buildout has largely been funded from free cash flow so far, raising focus on how quickly AI capex converts into earnings.
- Credit markets are increasingly funding AI, with Bank of America estimating $344 billion of AI-related debt issued through August.
- Nvidia outlined a $500 billion SPV-based financing plan to buy chips then lease them, with talks to backstop obsolescence risk.
Broadening U.S. equity rally flagged for 2026
Fidelis Capital flagged a broadening U.S. equity rally in 2026, with the equal-weight S&P 500 narrowly leading the market-cap benchmark.
