In early July, Meta's self-built cloud business was over-interpreted, sparking market panic over AI capital expenditures. However, less than half a month later, the narrative reversed again.

There is no excess computing power within Meta, and it is unlikely to cut CapEx in the short term. Just look at the news from the past couple of days:

1️⃣ Meta invests $10 billion to build its first Canadian data center
2️⃣ Meta's self-developed AI chip, Iris, is scheduled to enter mass production in September
3️⃣ Meta plans to double its total data center computing capacity to 14 GW by 2027
4️⃣ Meta has signed long-term supply agreements with Samsung and SanDisk for memory/NAND flash
5️⃣ Zuckerberg personally denied that there is excess computing power, saying he hasn't seen anyone in the industry who thinks they have too much

Sometimes it's truly hard to understand — is Wall Street genuinely worried that AI capital spending is unsustainable, or are they deliberately playing dumb, writing hit pieces to spread panic, driving prices down, and then buying the dip?

As it turns out, countless people panic-sold and liquidated their positions during the sell-off from late June to early July, forced to leave the table. Only after shaking out these weak hands can the next rally begin.