Newsletter · · Ashutosh Agarwal

The AI Capex Tracker - Week of June 23, 2026: Microsoft Flirts with DeepSeek, Micron's the Tape Wednesday

AI capex newsletter for the week of June 23, 2026. The bear case finally got a demand-side mechanism (Microsoft reportedly weighing DeepSeek R4 inside Copilot), even as the supposed first-to-cut signed a 20-year, 2.67 GW Chevron gas deal, with Micron's Wednesday print the only number that matters.

The AI Capex Tracker

Week of June 23, 2026: Microsoft Flirts with DeepSeek, Micron's the Tape Wednesday

Issue: Tuesday, June 23, 2026

TL;DR

  • The bear case found its demand-side trigger: China. On RiskReversal, Danny Moses and CNBC's Deirdre Bosa flagged Microsoft reportedly weighing DeepSeek R4 inside Copilot, the first time the "who cuts capex" question has a concrete demand crack attached. Cheap Chinese open-source models migrating into US hyperscaler stacks is the mechanism the bears were missing. (RiskReversal Pod, Jun 22)
  • Micron is the only print that matters this week, Wednesday after the close. Up ~850%, ~18x on ~100% expected earnings growth, "double the multiple this stock has traded on probably forever" (Guy Adami), with double/triple-ordering risk. A sold-out cyclical that merely meets is a sell-the-news. (RiskReversal Pod, Jun 22)
  • Yet the supposed first-to-cut signed one of the biggest power deals in US history. Microsoft inked a 20-year Chevron deal for a 2.67 GW behind-the-meter gas plant in Pecos, Texas, to "double its AI data center capacity over the next two years." GE Vernova (GEV) and Caterpillar (CAT) are the read-through. (Motley Fool Hidden Gems, Jun 22)

What's new

Slow cycle, no specialist analysts on the tape, and the lone operator voice was a European utility CEO. But two threads moved, and they pull opposite ways on the same name: Microsoft.

1. The capex-cut question got a demand-side mechanism, and it's Chinese. RiskReversal Pod, Jun 22, Danny Moses (PM), Guy Adami (Fast Money), Deirdre Bosa (CNBC). Journalist/PM commentary, not operator. Last week's bear thesis was balance-sheet (Chanos's ROICs, the FCF mirage). This week it turned to product. Microsoft owns ~26% of OpenAI after a ~$13B investment, but Copilot uptake has disappointed, so it moved from OpenAI-exclusive, to Anthropic, "and now they're going to, this is the big one here, DeepSeek R4," a Chinese open-source model. Bosa's kicker: "DeepSeek V4 is most efficient on Huawei chips." If a good-enough model wins and runs best on non-Nvidia silicon, that's a demand crack pointed at the premium-compute order book.

"The reverberations are massive, first comes out of the semis, then it finds its way into Samsung and SK Hynix... and then you have a real problem." (Danny Moses)

2. Micron is the binary, and the setup is loaded. Same episode. Guy Adami: Micron is up ~850%, expected to grow earnings ~100%, on a company that "lost $4.50 a share four years ago" and is now seen earning ~$100, at ~18x, "double the multiple this stock has traded on probably forever." His tell: even March's "ridiculous quarter" sold off over the next six-to-seven sessions. "Could you imagine what would happen if they come in in line and guide lower?" Underneath it: "double and triple ordering... is probably going to surprise people." Reports Wednesday, Jun 24, after the close, trade the guide, not the headline.

3. Microsoft is building flat out, not blinking. Motley Fool Hidden Gems, Jun 22. The same day the bears tag it as first to cut, Microsoft signed a 20-year Chevron deal for a 2.67 GW off-grid gas plant in Pecos, Texas, ~2,000 acres, ~30x a standard 100 MW data center, "one of the largest disclosed co-located independent power and data center developments in U.S. history," to "double its AI data center capacity over the next two years." Behind-the-meter because the on-grid queue runs "four to seven years." Alphabet and Amazon have filed permits for their own multi-GW off-grid gas campuses; ~a quarter of capacity in development now plans independent power. You don't sign 20-year gas tolls if you're about to cut.

4. A sell-side voice put a clock on the memory cycle. The Morning Filter, Jun 22, a Morningstar analyst. Prices are "going through the roof" and demand looks "locked in through at least 2028," but this is "a particularly strong and particularly durable upcycle, but a cycle all the same." The catalyst: "six memory makers... building out a whole large amount of new supply in late 2027 and 2028." Against last week's Zlatev "no rollover for years" bull, the debate is now when in 2027-28, not whether.

The debate

Bull steel-man, the build is accelerating and management is voting with 20-year contracts. You don't sign a two-decade, 2.67 GW gas toll, or file for multi-GW off-grid campuses, if you're days from cutting; demand is "locked in through at least 2028." (Motley Fool Hidden Gems, Jun 22; The Morning Filter, Jun 22)

Bear steel-man, correlated, momentum-priced, now exposed to a China demand shock. Moses's core complaint is price discovery: a name "that's already up... goes up another $150 billion market cap" on news that should've been priced, "they're all correlated... it won't take a lot, maybe one piece of news to have them all potentially trade lower." Add double/triple ordering and a global-GDP dependency on the capex itself: "if you see a pullback in CapEx spend, there are a lot of economies that are going to get hit really hard." (RiskReversal Pod, Jun 22)

Sell signals to watch: a confirmed Microsoft DeepSeek/Copilot adoption; a sold-out Micron that only meets Wednesday; any "matching demand" language or 2-year capex trim; memory-supply additions firming for late-2027/2028.

Stocks in play

NVDA. Bull: still "long what the chips produce"; the off-grid build-out is demand for more compute, not less. Bear: the complex is correlated and momentum-priced, and the DeepSeek/Huawei angle targets premium-GPU demand. Next: Rubin ramp; Q2 print. (RiskReversal Pod, Jun 22)

AVGO. Bull: the "number two pure-play in AI compute chips" (custom XPUs), Morningstar fair value $650, fundamentals "accelerating into 2027 and 2028." Bear: the June pullback wasn't a cut, it "failed to raise their guidance for 2027." Next: custom-silicon prints; any 2027 guide raise. (The Morning Filter, Jun 22)

AMD. Quiet on the tape, no MI450X/Helios color. Next: AMD Advancing AI Day, July 2026.

MSFT. Bull: signed a 20-year, 2.67 GW Chevron gas deal to double AI capacity in two years, capitulating to the build (Motley Fool Hidden Gems, Jun 22). Bear: the cleanest demand-discipline signal, soft Copilot uptake, token limits on its own engineers, a reported DeepSeek R4 lean (RiskReversal Pod, Jun 22). Next: FY26 Q4 capex commentary at July earnings.

GOOGL. Bull: filing permits for its own multi-GW off-grid gas campuses; a named hyperscaler PPA customer. Bear: the FCF-after-stock-comp mirage and issuance pace from last week stand. Next: July capex guide. (Motley Fool Hidden Gems, Jun 22; Redefining Energy, Jun 22)

AMZN. Bull: also filing for off-grid gas campuses; a named Engie PPA customer (Redefining Energy, Jun 22). Bear: the ~$33B Anthropic equity-for-compute circularity is unchanged. Next: July earnings.

META. Bull: a named Engie PPA customer, with its Louisiana "Hyperion" fleet backed by a multi-plant gas footprint (Redefining Energy, Jun 22; Motley Fool Hidden Gems, Jun 22). Bear: worst FCF distortion in the group, buybacks halted. Next: July earnings.

Read-throughs

  • Power / thermal (GEV, CAT), the most actionable trade on the tape. Chevron/Microsoft's 2.67 GW Pecos plant, Alphabet/Amazon off-grid permits, and the Homer City to EQT 4.4 GW build all point to gas turbines, "a lot of their electricity footprint is going to be generated by large gas turbines supplied by GE Vernova," with critical capacity from Caterpillar's Solar Turbines unit. With ~a quarter of new capacity going off-grid to dodge a four-to-seven-year queue, the turbine OEMs own the bottleneck. (Motley Fool Hidden Gems, Jun 22)
  • Memory / HBM (MU into Wednesday): trade the gross-margin guide, not the headline. Up ~850% at ~18x (2x its historical multiple), sold out, but the cycle has a clock (new supply late 2027-28) and double/triple-ordering risk. A correlated unwind hits Samsung and SK Hynix first. (RiskReversal Pod, Jun 22; The Morning Filter, Jun 22)
  • Networking / optics: a Morningstar analyst pitched Arista (ANET, FV $190) as "neck and neck" with Nvidia in networking and "totally agnostic" to the copper-to-fiber shift, and Amphenol (APH, FV $190) as the connectivity play unfairly punished on the same optics fear. (The Morning Filter, Jun 22)
  • Utilities / power-as-gating-item: quiet on US names. Engie CEO Catherine McGregor signed 4.8 GW of PPAs last year (the European leader), with Apple, Meta and Google among customers, and is now selling hyperscalers bundled "power, land, energy management and storage" to compress time-to-market, confirmation the power constraint, not the chip, is the gating item. (Redefining Energy, Jun 22)

What changed vs last issue

Last issue (Jun 22, "Chanos shorts the landlords, not the chips.") was a balance-sheet bear week, Chanos's neocloud ROICs, the FCF mirage, Visser tagging Microsoft as the likeliest first to cut. Over the last day:

  • The Microsoft-cut thesis got a mechanism. Visser's "Nadella commoditization lean" became a concrete report: Microsoft weighing DeepSeek R4 in Copilot. The bear case moved from can they afford it to will demand show up, now with a Huawei-optimized, Chinese wrinkle.
  • But Microsoft also blinked the other way, a 20-year, 2.67 GW Chevron gas deal to double capacity. The "first to cut" is the most aggressive builder on the power side. That tension is the trade.
  • Micron went from "Wednesday" to tomorrow, Jun 24 after the close, into ~850% gains, ~18x, and ordering risk.
  • AVGO's June drop got re-explained: not "Google-insourcing" fear but a failure to raise 2027 guidance (no cut), with Morningstar at $650 fair value and fundamentals "accelerating."
  • The memory debate narrowed: Zlatev's "no rollover for years" now meets a sell-side "finite cycle, new supply late 2027-28", timing, not direction.

No update on the ERCOT/SB6 July 15 gating deadline this cycle; that print is still ahead.