It is when the build-out — the data centres, the chips, the machines that make the chips — stops speeding up. A slowdown in that spending would not be the end of the AI trade, and it could be a pause rather than a turn. But it would change which companies get paid.
Forecasters already expect the pace to ease. The six biggest cloud spenders put about $470 billion into capital spending in 2025, are expected to spend about $870 billion this year and about $1.3 trillion in 2027, according to S&P Global estimates reported by the Motley Fool. That is growth of roughly 85% this year and roughly 50% next year — still rising, but more slowly. Alphabet has said its spending will rise “significantly” in 2027 because demand still runs ahead of the capacity it can build.
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So the useful question is narrower: what would show a cooling first? We follow ten signals in three places — the money going in, the order books along the supply chain, and the share prices. Today three point up, four are worth watching, two flash a warning and one reports next week.
1. The money going in
Capex growth. The first signal is the forecast itself: 2027 spending plans from Microsoft, Alphabet, Amazon and Meta when they report in late October. A cooling would look like guidance that comes in below the roughly 50% growth already expected, or the word “digest” replacing “supply constrained”.
How it is paid for. On our AI credit stress board, the four largest spenders generated $149.6 billion of free cash flow over the last four quarters and took on $166.6 billion of net new debt; about 30% of their capital spending is now funded with borrowed money. That is not stress yet — interest is covered many times over — but it is the line to watch when spending grows faster than cash.
The builders that borrow. The data-centre operators funded by project debt — CoreWeave, Nebius, TeraWulf and Applied Digital — score 86 out of 100 on the board’s stress scale. They burned $24.8 billion of free cash flow over four quarters and borrowed $31.2 billion. This group would feel a cooling first, because it has the least cash of its own.
2. The order books
Chip machines. Japan’s semiconductor-equipment makers billed ¥597.9 billion in August (three-month average, preliminary), 47.4% more than a year earlier, according to the industry association SEAJ. The year-on-year growth rate has risen every month since January, from 2.6% to 47.4%. The machines are ordered a year or two before new chips come out, so this is the earliest hard number on capacity. We added it to our Semicap / Test Pulse this morning.
ASML and TSMC. ASML reports on 14 October and TSMC gives its spending plan on 15 October. ASML stopped publishing its quarterly orders this year — it now reports its order backlog once a year — so its outlook for 2027 is the figure to read. Both dates come before the cloud companies report and are the closest public read on 2027 capacity.
TSMC’s monthly sales. TSMC sold NT$514.8 billion in August, 53.3% more than a year earlier and a record for the fourth month running. September’s figure is due by 10 October. A cooling would show first as a slower growth rate, not as falling sales.
Korea’s chip exports. South Korea exported $60.3 billion of semiconductors in September, up 262.8% from a year earlier, as reported by the Korea Times. Higher memory prices are a large part of that jump, alongside more volume — which is why the next signal matters.
Memory prices. Market researcher TrendForce expected conventional DRAM contract prices to rise 13–18% in the third quarter, a slower increase than before, with phone and PC makers pushing back on higher prices. Rising prices are not a cooling. Prices that rise more slowly quarter after quarter are the first step toward one.
3. The share prices
Good news, bad reaction. A top in prices often shows up as strong results that no longer lift the stock. On our Print Record this season, Micron beat and raised and the stock went nowhere over three days, Accenture beat and fell 8.9%, while Jabil gained 4.9% and Penguin Solutions trades 5.4% higher after Tuesday’s report. The coming weeks will show which reaction dominates.
Leaders versus the rest. Nvidia and AMD closed at records on Tuesday, but our Rubin Build-Out index, where 126 hardware companies count equally, is still 11.3% below its 22 June high, and the equal-weight chip fund XSD is 14.1% below its June high. Our Semicap / Test Pulse reads “late cycle — warning”: the testers at the end of the chain rose 31% in a month, the machine makers at the start 13%. A narrowing rally is the classic price-action sign before a cooling — though narrow rallies can run for a long time.
Ten signals for a cooling AI build-out
Table as text
Sources: S&P Global via the Motley Fool (capex), Closelooknet AI credit stress board (funding, as of 5 October), SEAJ, TSMC, Korea Times, TrendForce, Closelooknet Print Record, Rubin and Semicap / Test Pulse (closes of 6 October).
The other side: power gets tighter with Rubin
Not every part of the build-out cools with the spending. Since spring we have tracked power semiconductors as the bottleneck for late 2026 and 2027 — in April we named power delivery for the GB200 and Rubin racks as the catalyst for the group. The timing is now close. Nvidia has said Vera Rubin is in full production, with a volume ramp in the fourth quarter and rising shipments through the first half of 2027. With the Kyber racks for Rubin Ultra, planned for 2027, Nvidia moves its data centres to 800-volt direct current to feed racks of up to one megawatt.
That raises the power-chip content in every rack, even if fewer racks get built. Six of the seven companies in our Rubin power-semiconductor sector — Infineon, STMicroelectronics, onsemi, Monolithic Power, Renesas and Texas Instruments — are on Nvidia’s list of 800-volt silicon partners. The prices have started to move: all seven made their low between 14 and 16 September and are up 17–30% since, most of them back above their 200-day average. The sector rose 9.5% last week and 12.9% over the month. Infineon, at €64.68, is still 26.5% below its June high; the top of its two-month range is €69.80.
What we take from it
The hard numbers — chip machines, TSMC, Korea — still say the build-out is accelerating. The early warnings sit where they usually sit first: in the companies that borrow to build, in memory prices that rise less each quarter, and in share prices that rise in fewer and fewer names. That is not a call on the AI trade. It is the list we will tick off through earnings season, starting with TSMC’s September sales this week and ASML on 14 October — with power semiconductors as the part of the chain where Rubin makes the bottleneck tighter, not looser.
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Into tomorrow
Today: the Fed’s September minutes at 20:00 CEST. This week: PepsiCo on Thursday, Delta on Friday, TSMC’s September sales by Saturday; Penguin Solutions’ earnings window closes Friday. Next week: ASML on 14 October, TSMC on 15 October. The lines: Rubin −11.3% from its 22 June high; Semicap / Test Pulse 61, late cycle — warning; Japan chip-machine billings +47.4% a year.
The signals behind thisEach line links to the tool it comes from
LabSemicap / Test Pulse — now with Japan’s chip-machine billings→LabAI credit stress board — who funds the build-out, and how→101Power constraint — why electricity is the slowest part of the build-out→IndicesDaily AI Board — leaders against the equal-weight sectors→SignalsPrint Record — how stocks react to this season’s results→Morning 10Storage sold on a record day; chip-machine makers fall again→
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