Microsoft Corp. (NASDAQ:MSFT) and Meta Platforms Inc. (NASDAQ:META) are spending hundreds of billions of dollars to build the artificial intelligence infrastructure powering the next generation of computing. Yet, according to Wedbush analyst Dan Ives, investors are rewarding the companies selling the picks and shovels—while punishing those footing the bill.
The dynamic has become especially evident following Micron Technology Inc.‘s (NASDAQ:MU) blockbuster earnings, which reignited enthusiasm for AI memory stocks even as Microsoft and Meta continue to face heavy selling pressure.
Ives described the current market as a “Twilight Zone,” arguing that investors have become increasingly impatient with hyperscalers waiting for their massive AI investments to translate into meaningful revenue growth.
Microsoft, Meta Face An AI ‘Air Pocket’
According to Ives, the market is currently in an “air pocket stage” where Big Tech’s unprecedented spending has yet to produce the financial payoff investors are looking for.
