AI capex is massive but where’s the free cash flow? This earnings week is the real test

Semis got wrecked this month, SOX down 4% in a single session, SK Hynix off 8% on Friday alone. The whole sector shed roughly $1.3T in market cap through July.

Been tracking this setup for weeks. The thesis has flipped from "who can secure compute" to "who can actually generate cash from all that compute." Capex is still ballooning but the bond market already priced in doubt, Goldman's hyperscaler spreads blew out about 50bp to around 162bp.

This week is the reckoning. Microsoft, Meta Wednesday. Amazon, Apple Thursday. FOMC in between (hold widely expected at 3.75%). Semiconductor put-call skew doubled in two months, VIX is calm at 18 but that skew tells a different story under the hood.

My moo.moo alerts were going insane Friday. The flow into puts on semis is hard to ignore when names this big are moving 8% on a single earnings cycle from an overseas player.

If MSFT and META can show capex leveling off with FCF turning positive, maybe the re-rating holds. If not, bears are gonna say the whole AI trade was a capex bonfire. Am I reading too much into the spread widening, or is the cash flow wall real for these names?