Comment by magnetometer
2 hours ago
Usually, companies value opex more than capex - opex is much more flexible. That's one of the reasons why printers, coffee machines, companies cars and other things are typically leased.
2 hours ago
Usually, companies value opex more than capex - opex is much more flexible. That's one of the reasons why printers, coffee machines, companies cars and other things are typically leased.
Not really that simple. Opex gets better tax treatment (you can deduct it in full every year) but people aren't always Opex depending on what they're doing (research tends to be Capex)
Also tax treatment isn't the only consideration for financial engineering: It's easier for a company with a huge capital spend to argue that they're investing in the future and CapEx doesn't hurt EBITDA. On the other hand, some companies get worried about reporting a high "capital ratio" (ratio of capital assets to income).
In reality you can't say categorically that companies prefer Opex to Capex.
Concretely speaking, the FAANG companies are all wildly slashing opex (us) for capex (data centers, TPUs) even as the capex costs skyrocket due to demand outstripping supply.