---
title: An AI U-turn ?
description: "JP Morgan's Mark Schilsky argues that investors are becoming increasingly convinced that hyperscalers' massive AI investments are generating returns well above their cost of capital. After reading the latest quarterly earnings transcripts from Amazon, Microsoft, Alphabet, and Meta, that view is becoming difficult to dismiss. Management teams sounded more confident than ever that today's unprecedented AI spending will translate into sustainable, long-term earnings growth.\n\nIf Schilsky is correct, the valuation multiples of the Magnificent Seven may have already reached their lows. As confidence builds that AI capex is creating durable value rather than simply driving higher costs, investors could once again be willing to pay premium valuations, potentially well before free cash flow bottoms and begins to accelerate.\n\nSource: TME"
---

[Syz The Moment](https://blog.syzgroup.com/syz-the-moment)

# [An AI U-turn ?](https://blog.syzgroup.com/syz-the-moment/an-ai-u-turn)

 Written by [Charles-Henry Monchau, CFA, CMT, CAIA](https://blog.syzgroup.com/syz-the-moment/author/charles-henry-monchau) | Aug 5, 2026, 3:41:28 PM

[View full post](https://blog.syzgroup.com/syz-the-moment/an-ai-u-turn)

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