Martin Shkreli says AI investors may be making a dangerous assumption: treating today’s record earnings as though they will continue indefinitely.
The former hedge fund manager remains bullish on artificial intelligence and said the selloff in Meta (NASDAQ:META) looks like a buying opportunity.
His warning applies more directly to the companies supplying the infrastructure behind the boom.
What Happened
"There’s a big AI buildout right now, but it’s not clear that that peak can be sustained," Shkreli said during a livestream recorded on Thursday.
Semiconductor and data-center companies can look unusually cheap at the top of a cycle, he said, because current earnings reflect enormous demand for new capacity.
That spending can later work against investors.
New factories and equipment increase supply, while depreciation expenses begin eating into profits, he added.
Shkreli said investors should value those companies using the total earnings generated over the cycle, rather than extending peak profits into perpetuity.
"It’s very unlikely" that earnings surge, plateau and then resume growing without a reset, he said. "That sort of has never happened."
Buy Meta, Question the Suppliers
Shkreli took a more optimistic view of Meta after the stock fell about 9% Thursday.
"I actually think it’s worth buying down here," he said. "I don’t think that there’s too much to worry about."
Meta generated $31.86 billion in operating cash flow during the second quarter but spent $31.08 billion on capital expenditure, leaving free cash flow of $784 million. Free cash flow collapsed 91% from a year earlier.
Microsoft Corp. (NASDAQ:MSFT) offered the opposite example. Its stock surged after Azure revenue grew 43%, suggesting investors currently see a clearer return on its infrastructure spending.
Polymarket traders assign a roughly 19% chance that the AI bubble bursts by the end of 2026. The contract briefly jumped as Situational Awareness fueled fforced liquidation fears spread across the market before reversing much of the move.
Shkreli’s distinction is not between AI winners and losers. It is between companies benefiting from today’s demand and investors pricing that demand as permanent.
Image: Shutterstock
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