Yesterday’s Google earnings report was so good—also beat expectations—but it still couldn’t save the stock price. The main reason is that AI spending is too high, and cash flow has turned negative. Listed companies have to assess ROI and the input-output ratio—under the current state of AI, it definitely can’t bring in more revenue. If, in this round, even MAG7 starts tightening AI spending, then most likely this infrastructure semiconductor cycle is coming to an end. These semiconductor companies will need to return to normal valuations! Of course, the upside is that the bursting of the bubble will be pushed further out—maybe we can wait until an AI “emergence” effect makes it smarter, leading to more AI applications and more profits—then the AI era will truly begin!