Investors will be watching Wednesday’s earnings for updates on Big Tech’s artificial intelligence spending plans, as the companies splash hundreds of billions to secure the data centres, chips and electricity needed to sustain advanced models.
“All eyes will be on AI monetization vs. spending,” Bank of America analysts wrote.
Alphabet, Meta and Microsoft, along with Amazon, are forecast to spend $350bn this year and $410bn in 2026. The companies have ratcheted those plans higher and higher over recent quarters.
Three months ago, investors reacted positively to the last round of earnings despite this eye-watering spending, as the companies also posted strong financial results and gave signals of how AI was boosting their core businesses.
Since then, however, markets have proved jittery. Stocks took a sharp but temporary hit in August as traders fretted over warnings that a financial bubble around AI had far exceeded progress on finding practical applications for the technology.
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