Everything tied to the data center is suddenly suspect. Can Big Tech fix it?

Here is a story making headlines in the economy: I sure didn't want what happened to occur, at least not during my vacation, of all things. But it did, and we have to deal with the fallout head-on because it came as such a surprise to many. Imagine for a moment there were five geese — Amazon , Alphabet , Microsoft , Meta Platforms , and Apple — and they were laying golden eggs like mad.

No other stocks have consistently produced eggs like these five. It was like a fairy tale. Now that the fairy tale ended a long time ago, their incredible businesses, tremendous leadership, and franchises — moats — keep them a big part of the S & P 500 and the biggest part of tech, which is the biggest part of everything.

Economic Details

As long as nothing encroaches on their territories, these mega-caps can continue to invent and profit with their core businesses generating consistent gains. All you had to do was feed them your money, and they turned it into gold. Suddenly, it seems like the geese are being slaughtered.

But that's just exchange-traded funds talking. The pain the geese feel — and they are still very much alive — seems existential. The fact is, however, that it's not.

What's happened is that they are producing okay eggs, good for scrambling. But you didn't buy them to own egg producer Cal-Maine , did you? Last week, I wrote a piece about what I would do if I were a hedge fund manager — basically, go short ahead of Micron's earnings (last Wednesday) and then figure out how to get back in at a lower price.

Analyst Views

I, too, didn't want to take the gains. I, too, recognize that these companies aren't any less great, even though they do a lot of poaching. Someone should step back and realize that Meta CEO Mark Zuckerberg, while quite brilliant, has not been able to put together a dream team.

In fact, anyone who knows pro sports knows that a dream team is the kiss of death. It's now all hate and kisses. What really did happen here?

First, this whole space-race build-out for data centers has caught the eye of every politician and populist group, and these companies, save Meta and Apple, which have put together institutions designed to build things here on Earth — a commendable gesture, but not one that is getting enough praise. I know it: I study Apple's Advanced Manufacturing Fund and its efforts to onshore silicon, and I am suitably impressed. Billions of dollars make a difference.

Financial markets are tracking the development closely as investors assess the likely impact.