Market Focus Shift from Buybacks to Capex

The market has shifted its preference from share buybacks to massive capital expenditure growth, particularly among tech Hyperscalers. While capex is exploding, the traditionally favored 'Buyback Aristocrats' are now lagging behind.

Key Takeaways

• 1.Investment sentiment is shifting from financial engineering (buybacks) toward companies with high capital expenditure (Hyperscalers).
• 2.Hyperscaler capital expenditure grew by 91% year-over-year in Q1, while buybacks for the same group declined by 64%.
• 3.The 'Buyback Aristocrats' portfolio has begun to underperform the broader market recently despite a strong start to the year.

Table of Contents

• Miss Market's love has shifted
• Tale of two cities
• What investors like
• CapEx kings
• Buyback Aristocrats
• Aristocrat valuation
• Buybacks won't go away

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