Amazon was down 8% in premarket trading on Friday. Alphabet was 1% lower, Meta was largely unchanged, while Oracle, Nvidia and Microsoft were up in the low single-digit percentages. Plans to funnel [$660 billion into AI](https://www.ft.com/content/0e7f6374-3fd5-46ce-a538-e4b0b8b6e6cd) this year were announced by Big Tech stocks, the Financial Times reported, a figure higher than the GDP of countries like the United Arab Emirates, Singapore and Israel. Shares of companies developing hardware for the AI buildout will likely encounter continued volatility as “sentiment contagion takes hold,” Paul Markham, investment director at GAM Investments, told CNBC. “Questions over the extent of capex as a result of LLM build-outs, the eventual return on that, and the fear of eventual over-expansion of capacity will be persistent,” he added.
Amazon was among the firms announcing the biggest capex spending plans this earnings season. “The key focus of [Amazon’s] results was the capex guide of $200bn, up +56% on the year, ahead of market expectations and the highest amongst the hyperscalers,” Mamta Valechha, consumer discretionary analyst at Quilter Cheviot, said Friday morning, adding that the spend was predominantly for its cloud unit, AWS.
While management is confident of long-term returns on investment, the lack of visibility is not sitting well with investors, she added. “We have suddenly gone from the fear that you cannot be last, to investors questioning every single angle in this AI race.”
Who knew when 4-5 multi billion dollar companies keep exchanging money between each other for “investments”, recording it as revenue, and making deals with local governments to avoid/defer taxes on those investments would lead to a bubble.
Color me shocked.
Imagine if I kept exchanging 5 dollars with my 3 best friend, after 2 exchange, we all “have” 10 billion dollars…
Moobygriller on
Good
They’re feeling the effects of their own mistakes in creating an environment where they’re trying hard to convince the world that AI can fix anything. Noticably, they’ve also been using AI as an all encompassing excuse to lay off personnel.
In addition to big tech, VC funding is tied up in a gazillion startups whose only product is an AI enabled “insert product to disrupt here” garbage.
Successful_Ruin_8583 on
Growing up, I was always of the impression that these ivy league school, venture capital sort were always supposed to be geniuses, as evident from all their money. Now I assume they’re just idiots.
4 Comments
Big Tech companies have seen over $1 trillion wiped from their market cap over the past week**,** as fears over AI spending sparked a sell-off. [Microsoft](https://www.cnbc.com/quotes/MSFT/), [Nvidia](https://www.cnbc.com/quotes/NVDA/), [Oracle](https://www.cnbc.com/quotes/ORCL/), [Meta](https://www.cnbc.com/quotes/META/), [Amazon](https://www.cnbc.com/quotes/AMZN/) and [Alphabet](https://www.cnbc.com/quotes/GOOGL/) all saw their shares fall in the week up to market close on Thursday, as the companies’ earnings reports signaled huge continued capex spending from hyperscalers. In total $1.35 trillion has been wiped from their valuations, according to FactSet data.
Amazon was down 8% in premarket trading on Friday. Alphabet was 1% lower, Meta was largely unchanged, while Oracle, Nvidia and Microsoft were up in the low single-digit percentages. Plans to funnel [$660 billion into AI](https://www.ft.com/content/0e7f6374-3fd5-46ce-a538-e4b0b8b6e6cd) this year were announced by Big Tech stocks, the Financial Times reported, a figure higher than the GDP of countries like the United Arab Emirates, Singapore and Israel. Shares of companies developing hardware for the AI buildout will likely encounter continued volatility as “sentiment contagion takes hold,” Paul Markham, investment director at GAM Investments, told CNBC. “Questions over the extent of capex as a result of LLM build-outs, the eventual return on that, and the fear of eventual over-expansion of capacity will be persistent,” he added.
Amazon was among the firms announcing the biggest capex spending plans this earnings season. “The key focus of [Amazon’s] results was the capex guide of $200bn, up +56% on the year, ahead of market expectations and the highest amongst the hyperscalers,” Mamta Valechha, consumer discretionary analyst at Quilter Cheviot, said Friday morning, adding that the spend was predominantly for its cloud unit, AWS.
While management is confident of long-term returns on investment, the lack of visibility is not sitting well with investors, she added. “We have suddenly gone from the fear that you cannot be last, to investors questioning every single angle in this AI race.”
[Apple](https://www.cnbc.com/quotes/AAPL/), on the other hand, which has faced [pressure from Wall Street](https://www.cnbc.com/2025/07/30/apple-ai-hardware-devices.html) over its AI strategy and has previously committed [far less on capex](https://www.cnbc.com/2025/10/30/apple-isnt-playing-the-same-ai-capex-game-as-the-rest-of-the-megacaps.html) than other Big Tech firms, has seen its stock jump 7% since Monday on the back of what CEO Tim Cook described as [“staggering” demand for the iPhone.](https://www.cnbc.com/2026/01/29/apple-aapl-earnings-report-q1-2026.html) “The bet is becoming binary,” Michael Field, chief equity strategist at Morningstar, told CNBC, referring to the huge investments in so-called Magnificent 7 companies. “Either a big pay off if these investments come good, or a huge waste of shareholder’s cash if it goes wrong.”
Who knew when 4-5 multi billion dollar companies keep exchanging money between each other for “investments”, recording it as revenue, and making deals with local governments to avoid/defer taxes on those investments would lead to a bubble.
Color me shocked.
Imagine if I kept exchanging 5 dollars with my 3 best friend, after 2 exchange, we all “have” 10 billion dollars…
Good
They’re feeling the effects of their own mistakes in creating an environment where they’re trying hard to convince the world that AI can fix anything. Noticably, they’ve also been using AI as an all encompassing excuse to lay off personnel.
In addition to big tech, VC funding is tied up in a gazillion startups whose only product is an AI enabled “insert product to disrupt here” garbage.
Growing up, I was always of the impression that these ivy league school, venture capital sort were always supposed to be geniuses, as evident from all their money. Now I assume they’re just idiots.