Amazon, Google, Microsoft Stocks Tumble on Record AI Spending Fears
Amazon, Google, and Microsoft have collectively shed $900 billion in valuation since releasing earnings reports in recent days. The unprecedented spending commitments surpass Israel's entire gross domestic product and eclipse robust expansion across the companies' cloud computing divisions.
"AI bubble fears are settling back in," Brent Thill, an analyst at Jefferies, told the Financial Times on Friday. "Investors are in a mini timeout around tech, and nothing the companies say fundamentally matters."
Amazon equity plunged 7.8% during Friday's premarket session after the e-commerce titan revealed 2026 capital expenditures would hit approximately $200 billion—$50 billion above market projections—before shares regained stability. CEO Andy Jassy defended the allocation as essential for advancing AI capabilities, robotics systems, semiconductor development, and satellite initiatives.
Alphabet announced plans to nearly double capital spending in the coming year, directing most increases toward cloud infrastructure and AI development, pressuring share prices despite logging over $400 billion in 2025 revenue. Microsoft stock tumbled 18% following reports of substantial data center investments and revelations that 45% of its $625 billion pipeline of future cloud commitments depends on OpenAI technology. Meta initially rallied on AI-enhanced advertising performance before retreating amid broader technology sector deterioration.
Apple, which has maintained minimal AI infrastructure investment, surged 7.5% after disclosing record quarterly revenue of $144 billion. The company's capital expenditure declined 17% in the fourth quarter to $2.4 billion.
Market sentiment also soured after confirmation that OpenAI's anticipated $100 billion investment and infrastructure arrangement with Nvidia collapsed.
The dramatic escalation in AI-related spending has intensified speculation about asset price inflation. OpenAI has locked in computing contracts with Nvidia, AMD, and Oracle totaling over $1 trillion. Nvidia independently executed more than 100 AI-focused venture transactions throughout 2024. Financial analysts caution that investment capital predominantly circulates among a tight network of interconnected corporations, establishing what they characterize as circular financing mechanisms that artificially elevate valuations beyond genuine profit generation.
A recent PwC survey found that most chief executives report their organizations have yet to realize financial gains from AI deployments, with merely 12% documenting simultaneous revenue increases and cost reductions.
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