Ackman backs cloud giants, Burry adds to BYD and JD: market briefing

what happened

On Tuesday, US stock index futures traded mixed as investors awaited the midterm congressional elections. Seeking Alpha highlighted five developments in its market briefing.

Bill Ackman's Pershing Square said analyst forecasts lean on current capital spending and give too little weight to future revenue at major cloud and AI infrastructure providers. For Meta, consensus expects capex to climb from 50% to 65% of revenue between 2026 and 2029, while revenue growth slows from 27% to 15%. Microsoft and Amazon face similar projections.

Michael Burry increased his stakes in BYD (BYDDF, BYDDY) and bought call options on Sprouts Farmers Market expiring in 2028 and on JD.com expiring in 2029. He called JD a large position and BYD a mid-sized holding, without disclosing the size of the additions.

Prediction markets raised the chance that Democrats win both chambers of Congress. Polymarket put it at 77%, up from about 72% on Sunday, while Kalshi priced it near 75%. Historically, US stocks have gained over the 12 months after midterm elections, but rising Treasury yields, inflation and doubts about returns on AI spending could disrupt that pattern. State Street Chairman and CEO Ron O'Hanley said it is hard to call AI a bubble, since much of the infrastructure is being built against actual customer orders.

why it matters

Three questions matter for markets now: the political backdrop ahead of the vote, the seasonal record after midterms, and whether data center spending pays off. The last one depends on whether gains in AI efficiency reduce the capacity now under construction.

market impact

US tech stocks: debate over AI capex and returns sets sentiment for the sector

instruments