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Assessing whether AI-related valuations are supported by underlying fundamentals.

AI Bubble

Convequity's AI Bubble Barometer

9 min · 14 Jun 2026

Convequity’s AI Bubble Barometer shows AI valuations easing further this week while commercial demand for compute remains strong. Productive usage is still concentrated among developers, but is expected to broaden significantly as models improve and costs decline.

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Notes: AI Bubble? Refining the Forward ROIC

Notes: AI Bubble? Refining the Forward ROIC

Summary * The refined forward ROIC model focuses on Microsoft, Amazon, and Google, excluding Apple and Meta due to differing RPO dynamics and consumer-heavy business models. * Adjustments made are on boththe denominator (IC) numerator (return) side of ROIC to better align RPO with AI-related capex. * The revised model yields a two-year forward ROIC of 28.6%, exceeding the estimated two-year forward WACC of 16%, indicating current AI capex remains value-creative. * While estimates carry unce

7 min read 17 Nov 2025

Notes: AI Bubble? Spending, Risks, and Returns — A High-Level Assessment

24 min read 14 Nov 2025

Notes: AI Bubble? Spending, Risks, and Returns — A High-Level Assessment

Summary * Hyperscalers’ AI capex is soaring past historical limits, forcing creative financing and intensifying scrutiny over ROI and long-term sustainability. * Despite fears of an AI bubble, utilization remains high, demand is outpacing capex, and efficiency breakthroughs from Chinese labs are lowering compute costs while expanding practical use cases. * The

Beyond Operating Assets: Redefining ROIC for Tech Investors

15 min read 24 Jul 2025

Beyond Operating Assets: Redefining ROIC for Tech Investors

Summary * This project builds a capital‑allocator ROIC that judges how software CEOs deploy every dollar of capital, departing sharply from the traditional “operating‑asset” metric. * We expand invested capital to include goodwill, unrecognised SBC, cash + investments, purchase commitments, and non‑current deferred revenue, items that better reflect how software

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