Svmuu News: Serenity, known as the “White-Haired Stock Guru,” posted on X stating that reports claiming Meta cut capital expenditures due to “overbuilding” are highly misleading. Meta only sells computing power when there is excess capacity, and the current situation appears to be the opposite.
Hyperscalers such as Google reduced their computing power allocations to Meta in March due to capacity constraints, as Meta’s internal projects were consuming excessive resources. Meta immediately faced computing power constraints and was forced to sign massive contracts worth over $48 billion with Neoclouds such as CoreWeave and Nebius.
Meta only sells computing power when there is excess capacity, especially since its large contracts with Neoclouds are mostly take-or-pay agreements. Serenity expects Meta’s capital expenditure guidance to rise as it builds more independent capacity.