Serenity: Meta isn't cutting capital expenditure due to "overbuilding"; computing power remains constrained

Serenity, known as the "White-Haired Stock Guru," posted on X platform, stating that there is a lot of misleading information regarding Meta cutting capital expenditure due to "overbuilding." Meta would only sell computing power if there were excess capacity, but the current situation seems to be the opposite. 

Hyperscalers like Google cut their computing power allocation to Meta in March, as Meta's internal projects consumed too many resources, leaving Meta constrained by computing power. Meta was then immediately forced to sign massive contracts exceeding $48 billion with Neoclouds such as CoreWeave and Nebius.

Meta only sells computing power when there is excess capacity. In particular, the large contracts it has signed with Neoclouds are largely take-or-pay agreements. Serenity expects Meta's guided capital expenditure to rise, as it is building more independent capacity.