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

Jefferies analyst Christopher Wood warned in his latest Greed & Fear report that massive AI-related spending by major US hyperscalers (Microsoft, Meta, Amazon, and Alphabet) may result in malinvestment and capital destruction. He noted these four firms have issued bonds worth $144 billion so far this year, compared with $83 billion for the entire 2025, and highlighted that their shares have declined nearly 9% since late May. Wood also flagged geopolitical risks from the Ukraine-Russia-NATO conflict and recommended energy stocks as a hedge, while Michael Burry has placed bearish bets against several AI-linked names including Tesla and Nvidia.