The latest analysis from technology expert Luke Lango suggests that falling AI token prices do not indicate a weakening demand for AI. Despite a reported 27% rise in the cost to rent H100 compute, usage has surged, with Alphabet’s CEO Sundar Pichai stating that AI is utilizing 3.2 quadrillion tokens per month, a sevenfold increase in a year. Lango references Jevons Paradox, illustrating how cheaper resources can lead to greater consumption, indicating that falling token prices may actually lead to increased AI investment.
For investors keeping an eye on the AI infrastructure market, Lango advises monitoring companies like CoreWeave and Nebius Group, which have reported higher contribution margins thanks to growing demand. CoreWeave’s recent earnings indicated significant revenue gains, suggesting strong pricing power in the AI compute sector. In addition, the upcoming Personal Consumption Expenditures (PCE) report is expected to further impact market sentiment, as differing views on inflation within the Federal Reserve could shape future rate decisions and economic policy.
Overall, while current trends indicate robust growth in AI utilization, experts warn investors to remain vigilant about potential shifts in the market that could alter the landscape for AI investments.
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