Both the S&P 500 and tech-heavy Nasdaq recorded a third straight red day, with the latter falling over 1% yesterday – following Friday's 2.2% drop – and Bitcoin (BTC -7.31%) dropping below $90k for the first time in more than a month this morning. Analysts pointed to President Trump resuming tariff threats, alongside investor caution ahead of Nvidia (NVDA -3.09%) earnings.

We reported yesterday how Microsoft (MSFT -1.03%) has quietly been canceling leases for U.S. data center capacity. This has led strategists including Marko Kolanovic to cite the next AI race will be in cutting committed AI capital expenditure.

• Microsoft already earmarked $80 billion for capex this year: The potential sector shift comes as some investors have become skeptical about the eye-watering sums being spent on AI infrastructure. With the rise of Chinese start-up DeepSeek, seemingly powered on a fraction of the budget but achieving remarkable results, some believe that large-scale spending simply isn't needed.
• Avoiding becoming the "Lagnificent Seven": If large tech companies can manage to trim capex costs and build out AI in a more efficient manner that still meets demand, the potential for further long-term share price gains is high. Investors will likely reward the fastest movers in this regard, meaning that the next stage of the AI race may already have begun.

Stock Advisor rec Coupang (CPNG -0.77%) will release results after the market closes. Besides the financial performance, investors will be watching out for how the Farfetch integration is progressing as well as new product offerings, such as the R.Lux high-end line.

• Looking for direction in the competitive cloud computing space: A Hidden Gems rec since 2021, DigitalOcean (DOCN -5.42%) will report before the market opens. After releasing 42 new product features last quarter, shareholders will be looking for further commentary of new pipeline features, alongside any new AI partnerships.
• $40 million spent on customer acquisition last quarter: Lemonade (LMND 3.83%) reports later today, with investors hoping the business can build on the mixed bag from Q3. Alongside AI-automation progress, watch out for specific expansion plans in the car insurance space.