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Fund managers fretting over Corporate America’s “overinvestment” are only worried about one thing

Being concerned about “overinvestment” is really a very narrow statement about worries over hyperscalers’ ROI.

Big Tech capex makes the world go ’round.

In the US, the enduring AI build-out is responsible for fueling some explosive gainers, namely in memory chip and semicap stocks.

But these hot pockets of the market would be at risk if Big Tech CEOs listened to what CIOs want them to do: spend less.

“Capex too hot right now... CIOs telling CEOs to improve balance sheets (35% from 26%) vs. increase capex (20% from 34%) as FMS investors saying corps ‘overinvesting’ at new record high,” Bank of America Chief Investment Strategist Michael Hartnett wrote of the results of the latest BofA fund manager survey.

Being concerned about “overinvestment” is really a very narrow statement about worries over hyperscalers’ ROI.

At the S&P sector level, there is no broad-based capex boom: communication services, technology, and consumer discretionary (home to the Magnificent 7) are in a league of their own when it comes to boosting capex over the past five years.

While an AI bubble is still deemed to be the biggest tail risk, the share of investors judging this to be the case has winnowed significantly in recent months — along with the deflation in valuations for Big Tech’s big spenders.

Cash levels rose to 3.4% for February, “up from the record low of 3.2% in January, the first rise in 7 months,” per BofA, even as investors boosted risk-on positioning by going more overweight on equities as well as commodities and underweight on bonds.

This elevated positioning is one reason why the S&P 500 has struggled to make gains in 2026.

“Fund manager survey sentiment stays uber-bullish… asset price upside in Q1 harder when all positioned for it,” Hartnett wrote.

Luke Kawa13m

Sandisk drops after Western Digital confirms plan to unload $3 billion in stock

Western Digital is cashing in more of its Sandisk position.

The hard drive seller is exchanging more than $3 billion in Sandisk shares as part of a debt-for-equity swap.

The two companies were once one, but Western Digital spun off a little more than 80% of its flash drive business in February 2025, and already exchanged the lion’s share of what remained in a separate debt-for-equity swap in June.

This move was very, very well telegraphed by Western Digital, which recently confirmed plans to monetize its Sandisk position before the one-year anniversary of that split (February 21). And Sandisk’s press release makes clear that the company is not the ones selling more stock or making any money off this.

That being said, being a high flying stock that has a Bloomberg headline with “secondary offering” in it could, in theory, spark some turbulence.

Shares of Sandisk have indeed extended the day’s losses to more than 8% in the after-hours session before paring some of that decline.

Western Digital announces additional $4 billion in share buybacks, with management poised to unload its remaining stake in Sandisk

That being said, being a high flying stock that has a Bloomberg headline with “secondary offering” in it could, in theory, spark some turbulence.

Shares of Sandisk have indeed extended the day’s losses to more than 8% in the after-hours session before paring some of that decline.

Luke Kawa42m

Cadence Design Systems jumps after Q4 earnings, 2026 profit outlook, and sales backlog exceed estimates

Cadence Design Systems jumped in after-hours trading on Tuesday, briefly erasing the day’s big losses, after posting better-than-expected Q4 earnings, a big pipeline of future business, and a solid profit outlook for 2026.

For Q4, the electronic design automation company reported:

Sales of $1.44 billion (estimate: $1.42 billion).
Adjusted earnings per share of $1.99 (estimate: $1.91).
Remaining performance obligations (RPO) of $7.8 billion (estimate: $7.25 billion).

Management said that 2026 adjusted earnings per share would range between $8.05 and $8.15, above the consensus call for $8.03.

In recent weeks, investors have worried that Cadence’s software business, which is used by chip designers, could suffer competitive pressure from AI tools. At the very least, that RPO figure says there’s billions of dollars standing between Cadence and any more disrupted future.

Luke Kawa

Final Boss

46m

Infleqtion CEO Matt Kinsella on how the newly public quantum computing company is “following in the footsteps of Nvidia”

Infleqtion shares gained double digits in their opening session, while peers sold off.

Tasha Matsumoto

Stocks erase morning losses in volatile trading session

The S&P 500 posted a small gain, the Nasdaq 100 posted a small loss, and the Russell 2000 finished flat.

Josh Giddey #3 of the Chicago Bulls grabs a rebound during the second half against the Detroit Pistons on October 22, 2025 at the United Center in Chicago, Illinois.

Max Knoblauch2h

Oil prices dip, sending airline stocks climbing amid US-Iran talks

An agreement between the US and Iran on a “set of guiding principles” following talks between officials from the two countries on Tuesday is sending oil prices lower. That, in turn, is boosting airline stocks.

West Texas Intermediate crude futures were down 1.1% Tuesday afternoon. Shares of airlines, including United Airlines, American Airlines, Alaska Air, JetBlue, and Delta Air Lines were up.

Southwest Airlines, which also received an upgrade to “buy” and a price target hike to $73 from $51 by UBS on Tuesday morning, was up more than 7%.

Iran said it temporarily closed the Strait of Hormuz for live fire drills on Tuesday as the talks began. About 20% of the world’s oil passes through the key choke point waterway. Later in the day, however, Iran’s foreign minister expressed optimism that a deal could be reached with the US, saying “a new window has opened.”

Fund managers fretting over Corporate America’s “overinvestment” are only worried about one thing

More Markets

Sandisk drops after Western Digital confirms plan to unload $3 billion in stock

Western Digital announces additional $4 billion in share buybacks, with management poised to unload its remaining stake in Sandisk

Cadence Design Systems jumps after Q4 earnings, 2026 profit outlook, and sales backlog exceed estimates

Oil prices dip, sending airline stocks climbing amid US-Iran talks

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