First Trust Dow Jones Internet Index Fund Sheds 10.25% as Hyperscalers Boost $650B Capex
First Trust Dow Jones Internet Index Fund has fallen 10.25% over the past year as AI-driven repricing pressures capital-light tech valuations. Meanwhile, hyperscalers’ capex is projected to exceed $650 billion in 2026 as AI shifts market leadership toward heavy-asset, low-obsolescence industries.
1. FDN's Yearly 10.25% Decline
First Trust Dow Jones Internet Index Fund recorded a 10.25% decline over the past year, underperforming capital-intensive peers as AI-driven repricing eroded long-term growth expectations for internet companies.
2. AI Disruption of Capital Light Models
Goldman Sachs’ HALO framework highlights how AI compresses margins in capital-light SaaS and digital platform businesses, prompting a shift away from growth stocks toward heavy-asset industries with durable economic moats.
3. Hyperscalers' $650 Billion 2026 Capex
Since 2022, U.S. hyperscalers have committed $1.5 trillion in capex through 2026, with this year’s investment projected to surpass $650 billion, underscoring the market’s pivot to physical infrastructure over scalable software models.
4. Implications for Internet Index Fund
Internet fund investors may face continued headwinds if valuation convergence persists and flows favor utilities, energy and materials sectors, challenging recovery prospects for capital-light portfolios like FDN.