BlockBeats News, July 2nd. Meta's stock price surged during Wednesday's U.S. trading session, putting AI hardware trading under sudden pressure. The market was initially expecting a relatively quiet start to July. The U.S. stock market performed strongly in the second quarter, with the S&P 500 just having one of its best quarters since the 2020 pandemic rebound. However, before the U.S. market opened, news about Meta potentially releasing or selling "excess computing power" suddenly changed the market narrative.

This news was positive for Meta itself. The market interpreted it as the company shifting from continued capital expenditure to a stronger emphasis on financial discipline and free cash flow. As a result, Meta's stock price soared, with a reported single-day gain of about 10%, one of the best daily performances this year.

However, for the AI hardware chain, it was a different story. One of the most crowded trades in the market in recent months has been betting on cloud providers' continued expansion of computing power, storage, and data center capital expenditure. If Meta starts releasing excess computing power, investors will naturally question: Is the demand for AI computing power really as tight as previously expected? Is the capital expenditure of cloud providers still only upward, with no downward revisions?

UBS trader Christina Dwyer stated that the Meta event shifted the market narrative towards "greater financial discipline," while alleviating concerns about the continuous rise in capital expenditure. This is beneficial for platform technology companies whose valuations are already close to their lows but weakens the "long-term computing power shortage" logic that supported neocloud, semiconductor, storage, and AI supply chain stocks.

The market reaction was swift. The BofA Neocloud Basket significantly declined, storage and momentum stocks were impacted, and targets like SanDisk and Micron, which had previously surged, were sold off. Micron, in particular, is seen as a key observation point: it has been holding above the 20-day moving average since April, and if it falls below, it could open up the potential for a retracement to the 50-day moving average, indicating about a 20% potential downside risk.

This adjustment quickly evolved into a momentum trade sell-off. BTIG's Jonathan Krinsky pointed out that the Bloomberg Mag7 index had its largest single-day rebound relative to the Philadelphia Semiconductor Index SOX since 2015. In other words, funds flowed from chip, storage, and high-beta AI hardware stocks back to large-cap platform technology stocks. The Goldman Sachs High-Beta Momentum Basket fell about 9% in a single day, and the long and short high-beta momentum combination fell about 10%, marking one of the worst performances since the 2020 vaccine news shock.

The Meta event serves as a reminder to investors that cloud providers, who truly bear the capital expenditure, also consider return on investment. Once the certainty of an upward revision in capital expenditure diminishes, the segment with the highest increase in the AI hardware chain, and the most crowded valuation, will be the first to come under pressure.

However, the funds did not completely exit the AI theme. Software stocks outperformed semiconductors, and Bitcoin rebounded as funds moved out of AI/storage momentum trades. Another beneficiary was other AI bottleneck assets such as capacitors, indicating that the market is still searching for scarcity in the computing power infrastructure, just not blindly chasing storage and chip momentum stocks.

Another risk that the current market needs to pay attention to is the very poor liquidity. Goldman Sachs Trading Desk reported that in June, S&P E-mini top-of-book liquidity decreased by 33% month-over-month, yet U.S. stock trading volume hit the highest level since 2026. This means that while trading activity appears active on the surface, actual absorption capacity has weakened; once a large sell order emerges, prices are more prone to sharp swings.

The true meaning of the Meta event may not be Meta itself, but rather that it hit the most sensitive spot of the AI rally: whether capital expenditure will continue to grow limitlessly. The demand for AI has not disappeared, but the market is starting to differentiate between two types of companies: those that are platform companies able to consistently monetize their computing power investments, and hardware and storage suppliers that have already fully reflected the expected shortage of computing power.