The Zhitong Finance App learned that AI hardware stocks declined again. As of press release, Guanghe Technology (01989) fell 7.85% to HK$68.05; Cambridge Technology (06166) fell 7.24% to HK$69.85; Zhongji Xuchuang (03308) fell 6.94% to HK$730.5; and Changfei Optical Fiber Cable (06869) fell 6.18% to HK$104.7.

According to the news, Google's parent company Alphabet released results for the third quarter that both revenue and profit fell short of expectations. In the third quarter, Alphabet's capital expenditure was $51.4 billion, lower than market expectations of $55.8 billion. Even though capital expenditure was curtailed, the company's free cash flow was still negative at $9.1 billion, a negative value for the second consecutive quarter, compared to the market's previous forecast of negative $3.5 billion. Furthermore, Alphabet's borrowing volume rose sharply in the third quarter, and long-term debt climbed from US$21.6 billion a year ago to US$125.1 billion, an increase of about 479%.

Fangzheng Securities previously pointed out that the continued expansion of cloud companies' capital investment is an important support for the current round of the AI hardware market, but the increase in investment scale is not always in sync with the rise in stock prices. Whether the market expectation that the cloud factory capital expenditure growth rate is peaking in this round is true may have great guiding significance for the sustainability of the AI hardware stock market in the future.

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