The market is overreacting to hyperscaler credit concerns because spot GPU rental prices exceed contracted rates and operating cash flow growth is underappreciated as AI funding.
“Market is overreacting to hyperscale credit spreads widening from my perspective. TL;DR Spot pricing for renting GPU compute materially above contracted rates implies hyperscalers are underearning while operating cash flow acceleration is an underestimated source of funds for AI”
Baker suggests the two trillion dollar figure may actually be too low rather than inflated.
“ Here is the twist. The $2 trillion figure that set off the week's panic may not be a hype number at all. It may be a lowball. Baker's explanation starts with how IPO leaks actually work. The bank running an IPO is called the ”