Despite ballooning capital expenditures, tech giants like Microsoft, Meta, Alphabet, and Amazon are seeing surging investor confidence, thanks to strong early returns from AI-driven products in cloud, advertising, and search.
Massive AI Spending
- Microsoft plans a record $30 billion in Q3 capex – potentially outspending all rivals in the next year.
- Alphabet (Google) raised its 2025 capex forecast by $10 billion to $85 billion.
- Amazon is set to spend ~$118 billion in 2025 (up from $100B projections).
- Meta raised its capex forecast by $2 billion, to $66–72 billion, with AI-related costs driving expense growth into 2026.
Strong Results, Rising Stock Prices
- Microsoft shares jumped 4%, surpassing $4 trillion in market value.
- Meta soared 11.3%, adding $200 billion to its valuation.
- Alphabet beat revenue expectations with 450M+ users on Gemini AI.
- Amazon slipped 7% post-earnings due to underwhelming cloud results, despite 1.7% daytime gain.
AI Monetization Is Underway
- Microsoft revealed:
- $75B in Azure cloud sales
- 100M+ Copilot users
- 800M+ users using Microsoft AI tools
- $75B in Azure cloud sales
- OpenAI’s ChatGPT has ~500M weekly active users
- Meta’s AI tools are gaining momentum, with ad revenue still strong
Investor Mood: Bullish
“The big boys are back… The Magnificent Seven is still magnificent.”
– Brian Mulberry, Zacks Investment Management
Analysts say current revenue growth justifies the capital intensity. AI is now seen as the primary growth engine for Big Tech, helping offset economic uncertainty and tariff pressures across global markets.
Bottom LineAI is no longer hype – it’s becoming the core business for the tech elite. Investors are betting big that these early returns will turn into sustained, long-term growth, and Wall Street is listening.