HK Stock Market Move | AI hardware stocks led the decline. Cloud providers' cash flow is depleted. The market is focused on the sustainability of future capital expenditure.

AI hardware stocks led the decline. As of press time, GigaDevice Semiconductor Inc. (03986) fell 4.07% to HK$424.8; TRIGIANT (01300) fell 4.01% to HK$3.35; Hua Hong Grace Semiconductor (01347) fell 1.85% to HK$106.2; Semiconductor Manufacturing International Corporation (00981) fell 1.30% to HK$60.75; KB LAMINATES (01888) fell 1.18% to HK$54.45. On the news front, Microsoft, Google, Meta, and Amazon have issued 2026 capital expenditure guidance totaling approximately $730 billion, about 77% higher than the roughly $410 billion in 2025. Barclays estimates that the capital expenditure of the five major players has consumed about 90% of their operating cash flow, and they may need to take on debt or sell assets to sustain the pace of construction. The Carlyle Group said private credit institutions are racing to provide financing for AI infrastructure construction, potentially repeating the mistake of concentrated credit exposure in the software industry. Founder pointed out that the continued expansion of cloud providers' capital expenditure is an important support for this round of AI hardware market performance, but rising investment scale and stock price gains do not always move in sync. Whether the market expectation that the growth rate of cloud providers' capital expenditure has peaked in this cycle holds true may have significant guiding implications for the sustainability of future AI hardware stock performance.