AI Capex Overbuild

Hyperscaler AI capex was revised to $720bn-plus for 2026, up from $600bn estimates earlier in the year. OpenAI's deferral of its public market debut to 2027 has provided the overbuild thesis with its first clean demand-side catalyst, reframing committed infrastructure spend as potentially stranded rather than aggressive-but-justified. Microsoft's worst monthly performance since 2000 and Oracle's 16.9% five-day drawdown are the tape beginning to price the capex-to-revenue mismatch. Morgan Stanley's $500bn-plus AI debt issuance projection for 2026 has reframed the cascade from an equity valuation story to a credit market risk, with investment-grade spreads the key signal to watch. Intra-sector rotation has broadened, with AVGO re-rating toward execution names while infrastructure-heavy names bear the brunt. On the macro side, 80 uncleared mines and a confirmed drone attack have left the Versailles framework functionally inoperative; Brent at sub-$73 reflects contested rather than resolved risk. NthEffect tracks the rotation inside the AI complex as the overbuild thesis matures from a single equity trade into a credit and stock-picker's market.