AI capex sustained but with China decoupling tail risk

Moved from 2.1.6 0.85 ± 0.04 to 0.86 ± 0.04 - mean step of +0.01, reversing the 2.1.6 step once the full figures landed. 2.1.6 had walked the thesis down -0.01 reading the after-hours reaction as a soft guide; the released figures show a beat-and-raise - record revenue $81.6B (+85% YoY), adjusted EPS $1.87 (+140% YoY), current-quarter guidance $91B above the ~$86B whisper - plus a 25x dividend hike and $80B buyback. For a capex-sustained thesis the named tell printed bullish: the forward guide was raised well above expectations. The stock still fell ~1% after-hours, but that is a valuation/positioning reaction (45x trailing P/E, $5.3T cap), not a demand signal, so the step is +0.01 and width holds at 0.04 (the China export-control tail is unchanged). Beta(63, 10.2) ~73 effective observations, alpha stepped up on the beat-and-raise corroboration. The 2.1.6 "muted/soft-guide" evidence is retained as the audit record of the initial after-hours read.

Hyperscaler AI capex continues at elevated pace into 2026. AMD Q1 2026 (May 5 AH) materially confirmed the demand side - revenue $10.3B vs $9.88B consensus, Data Center +57% YoY at $5.8B, Q2 guide $11.2B vs $10.3B consensus, Lisa Su quoted "tens of billions" by 2027. NVDA Q1 FY2027 (May 20 5 PM ET) is the next binary tell - consensus $78.8B revenue (+77% YoY) / $1.77 EPS; Q2 guide near $86B is what the after-hours reaction rides on; options price an 8-10% implied move; prediction-market beat probability is ~97% priced in - the asymmetry is unfavorable on the upside, and NVDA has closed lower on 4 of its last 5 earnings reports despite beating revenue 3-4% for six straight quarters. Huang estimates the unrealized China market at ~$50B "effectively gone with no clear return timeline". The May 14 H200 export approval to ~10 Chinese firms (Alibaba, Tencent, ByteDance, JD.com plus Lenovo and Foxconn) holds through the weekend into Monday and through Tuesday morning - the Trump-Xi summit concluded with no AI-policy reversal or extended-export-control reinstatement. Friday May 15 delivered broad chip profit-taking on the oil shock / rate-up backdrop: NVDA 225.32 (-4.42%), AMD 424.10 (-5.69%), INTC -8% to ~$108 (after a YTD +214% run), MU -6.6%. CSCO printed a divergent +13.4% to 118.21 confirming the Wed-AH Q3 print (FY26 AI orders raised to $9B from $5B, HSBC upgrade to Buy with $137 PT). Monday close NVDA $222.32 (-1.33%), AMD $420.99 (-0.73%), QQQ $705.88; Tuesday close NVDA 220.61 (-0.77%), AMD 414.05 (-1.65%) on pre-earnings positioning, with Wednesday pre-market NQ futures +0.8% recovering ahead of the after-close print. The PHLX Semiconductor Index sits ~32% above its 50-day moving average after a +143% trailing year - a consolidation setup. The Rubin architecture H2 2026 ramp is the positive overhang investors are watching for. Update May 20: NVDA reported Q1 FY2027 after the close and the initial after-hours reaction was muted on lower-than-expected guidance - the Q2 guide, the operative variable, did not clear the priced-for-perfection bar; the demand side nonetheless stayed firm intraday with AMD 447.58 (+8.10%) on memory-supply tightness and a broad AI rally. Update May 21: the full figures correct the 2.1.6 "soft guide" read - NVDA reported record revenue of $81.6B (+85% YoY) and adjusted EPS $1.87 (+140% YoY) with current-quarter guidance of $91B, above the ~$86B Street whisper, plus a 25x dividend increase and a new $80B buyback; the stock still fell ~1% after-hours on a 45x P/E and a $5.3T cap. The named tell printed bullish for a capex-sustained thesis; the soft tape is a valuation/positioning reaction, not a demand signal.