Alphabet, Meta and Amazon poured $380 billion into AI — but not everyone is winning from the spend

Major tech giants — Alphabet, Meta, Microsoft and Amazon — have made it through earnings season, and they sent a unified message to Wall Street: Artificial intelligence investments are increasing, and it will only get bigger in the near future.

These four tech giants have lifted their guidance for capital expenditures and now collectively project that number to exceed $380 billion this year as they race to build out infrastructure for the “virtually limitless demand” for AI services.

Sky-high spending projections and bubble concerns

The sheer scale of these spending projections is notable, as they are even dwarfing OpenAI, which has recently announced roughly $1 trillion worth of infrastructure deals with partners including Nvidia, Oracle and Broadcom.

However, this growing level of spending has fueled skepticism among some observers who are voicing their concerns that these figures are fueling a bubble. They are also questioning whether there’s sufficient energy and resources to ever turn lofty AI promises into reality, news channel CNBC reported.

How did companies perform this earnings season?

Investor reactions was mixed following the announcements as Amazon saw its stock soar after beating estimates on earnings and revenue and raising capex forecast to about $125 billion this year, up from a prior forecast of $118 billion.

Alphabet, who owns Google also got praised by investors, reporting an earnings beat and boosting its capex forecast for this year to between $91 billion and $93 billion from a prior range of $75 billion to $85 billion, leading to a rise in stock by 2.5% on Thursday.

However, not all companies had a similar fate. Microsoft shares fell about 3% despite exceeding revenue estimates, largely after CFO Amy Hood said on the earnings call that capex growth would accelerate in fiscal 2026, suggesting a massive spend beyond current year's projections.

Meta’s stock was hit harder, plummeting 11% on Thursday, its steepest drop in three years, despite strong all-around results. The company narrowed its capex guidance to between $70 billion and $72 billion, from a prior range of $66 billion to $72 billion, CNBC reported.

What does the different market reactions mean?

The differing market reactions for the stocks of the major four tech companies highlight a key divergence. The AI investments made by Amazon, Microsoft and Google will directly bolster their cloud infrastructure businesses.

Whereas, Meta does not have a cloud service and lacks a clear revenue story that’s tied to its AI investments. The company said that its benefits from AI come from improved performance in its core digital ads business.

Even after the clarification, analysts at Oppenheimer downgraded the Meta stock to hold from buy, citing an “unknown revenue opportunity” in what the company is calling superintelligence, and said investors will struggle with “aggressive revenue growth offset by high spending.”

Meta CEO Mark Zuckerberg announced in June that the company will create Superintelligence Labs, led by some of Meta's costly high-profile hires, including Scale AI ex-CEO Alexandr Wang and former GitHub CEO Nat Friedman.

Cantor analysts noted said that cloud providers with “expansive service stacks like Microsoft” are in a better position to benefit from the current AI infrastructure build out, though they too expressed concerns over the seemingly endless spending forecasts.