Mag 7 Plans to 'FOMO' Into $650B Tech Investment Despite Trump's U.S. Manufacturing Push

Key Points

1. The 'Mag 7' (Alphabet, Amazon, Apple, Meta, Microsoft, Nvidia, Tesla) are expected to spend $650 billion in capex and R&D in 2025, exceeding the U.K. government's annual public investment.

2. U.S. corporate IT spending rose 13.6% year-over-year to $1.45 trillion, accounting for over 40% of total private fixed investment, while non-IT investment fell by 4.9%.

3. The shift towards 'bits' (digital/AI) over 'bricks' (traditional sectors) is partly driven by FOMO (fear of missing out) on AI opportunities, as noted by Lloyds Bank strategist Nicholas Kennedy.

4. The Biden administration's CHIPS Act initially boosted IT investment, but the momentum has shifted towards AI-related projects, further diverting resources from traditional sectors.

5. The crypto market has benefited from favorable regulatory policies under Trump, including bipartisan-supported measures on stablecoins.