Jefferies' Christopher Wood warns Microsoft, Meta, and Alphabet AI spending may backfire

Jefferies' Christopher Wood warned that massive AI infrastructure spending by US hyperscalers Microsoft, Meta, Alphabet and Amazon risks severe 'malinvestment' and capital destruction. The four firms have issued $144 billion in bonds so far this year versus $83 billion for all of 2025, while their shares have fallen about 9% since late May and underperformed the S&P 500 by over 10%. More than $2 trillion was wiped off the Magnificent 7 stocks last month amid bubble concerns, with Michael Burry also betting against Tesla, Nvidia and Palantir. Wood separately flagged rising Ukraine-NATO conflict risks and recommended energy stocks as a geopolitical hedge.