Bitcoin slides as investors rotate from Magnificent 7 to AI chipmakers, memory and SpaceX
Investors are rotating out of the Magnificent 7 tech complex and also reducing momentum in crypto as AI spending comes under scrutiny. Microsoft is down about 33% from highs, Meta down around 28%, and Tesla down roughly 20%—while Bitcoin (BTC) is down about 50% from its October peak.
The article argues the market isn’t abandoning AI, but is reallocating toward the infrastructure that powers the AI boom. Flows are highlighted toward semiconductors and memory: Sandisk has surged about 800% this year, and memory/AI-focused baskets such as the Global X Artificial Intelligence & Technology ETF (DRAM) are up about 140%. In microprocessors, Micron (MU) is up about 230%, and the VanEck Semiconductor ETF (SMH) is up 67%.
Investors are also favoring space-linked exposure tied to AI expansion. SpaceX (Elon Musk’s company) raised $75 billion in what is described as the largest IPO in history.
On the spending and fiscal impact side, hyperscalers’ capex plans are accelerating: Alphabet, Amazon, Microsoft and Meta are expected to spend a combined $725B this year, up 77% year over year. The funding mix is worsening for shareholders: free cash flow is “no longer fully” supporting the plans, borrowing reached about $93B last year, and share repurchases fell 33% to $132B in 2025.
Overall, Bitcoin is framed as losing traction while capital shifts toward semiconductors, memory and SpaceX-linked opportunities—an AI-infrastructure trade rather than a hyperscaler spend bet.
Bearish
This news reads as a capital-rotation story. The article links weakening momentum in both the Magnificent 7 and Bitcoin, and it explicitly frames investors as moving from hyperscalers (and crypto winners) into AI “picks-and-shovels” like semiconductors and memory, plus SpaceX-linked plays. For traders, that usually means near-term relative underperformance risk for Bitcoin: if marginal flows shift to hardware/infra equities, BTC can lose bid strength, especially when BTC is already ~50% below its October peak.
Historically, similar “rotation away from a crowded theme” events can pressure the previously dominant asset in the short run (while infrastructure beneficiaries catch the flow). The long-term effect can be more mixed: AI demand remains intact, and if hardware spending sustains earnings, broader risk appetite may eventually re-include crypto. However, the article also points to deteriorating shareholder-funding conditions for hyperscalers (higher capex, more borrowing, lower buybacks), which can keep liquidity and sentiment tighter—often a headwind for high-beta assets like BTC.
Net: bearish for BTC in the short-to-medium term because the narrative encourages flows away from Bitcoin toward AI infrastructure proxies, with only a potential later offset if the AI hardware cycle translates into renewed broad market risk-taking.