Roth Capital's Rohit Kulkarni on 2026 Market Outlook, Hyperscaler Capex Risk, and Cautious Sentiment

On December 31, 2025, Rohit Kulkarni, senior research analyst at Roth Capital Partners, appeared on CNBC’s Squawk on the Street to discuss three critical themes: 2026 market outlook, capital expenditure (capex) risk for hyperscalers, and market sentiment being “on a razor’s edge” [1].
Recent market data from the Ginlix Analytical Database [0] aligns with this cautious sentiment. Between December 24 and December 31, 2025:

• The S&P 500 declined by -0.71%
• The NASDAQ Composite fell by -0.99%
• The Dow Jones Industrial Average dropped by -1.01%
• The Russell 2000 (small-cap index) lost -2.16%

On December 30, the Technology sector (which includes hyperscalers like Amazon Web Services, Microsoft Azure, and Google Cloud) underperformed, declining by -0.28% [0]. This sector movement directly correlates with Kulkarni’s concerns about capex risk, as reduced spending on data centers, servers, and infrastructure by hyperscalers could pressure growth for tech sector firms and their suppliers.

1. Broad Cautious Sentiment
   : The decline across all major indices, especially the Russell 2000 (which is more sensitive to economic uncertainty), indicates widespread investor caution rather than isolated sector-specific concerns.
2. Pre-Existing Capex Concerns
   : The Technology sector’s underperformance on December 30 suggests investors were already pricing in potential capex reductions by hyperscalers before Kulkarni’s interview.
3. Information Gaps
   : Limited public access to the full interview transcript creates uncertainties about specific 2026 market projections, targeted hyperscaler risks, and the exact macroeconomic factors driving the “razor’s edge” sentiment.

• Hyperscaler Capex Impact
  : Reduced capital expenditure by hyperscalers could negatively affect direct players (Amazon, Microsoft, Alphabet) and their supply chain (semiconductor companies like NVIDIA, server manufacturers like Dell Technologies).
• Short-Term Volatility
  : The “razor’s edge” sentiment signals elevated short-term market volatility, with potential triggers including unreported macroeconomic concerns or upcoming corporate earnings reports.
• Sector Rotation
  : If capex risks materialize, investors may rotate out of Technology stocks into defensive sectors (e.g., Consumer Defensive, Utilities), putting further pressure on tech valuations.

No clear market opportunities are highlighted in the available data. The analysis focuses on risk mitigation and monitoring for further clarity on 2026 outlook and capex trends.

Rohit Kulkarni’s interview underscores cautious market sentiment and potential risks to the Technology sector from hyperscaler capex reductions. Recent market indices and sector performance align with these concerns, but critical details about specific 2026 projections and sentiment drivers remain unavailable due to partial interview content. Decision-makers should seek the full interview transcript or additional Roth Capital research to gain a more comprehensive understanding of the risks and outlook.