Big Tech's AI splurge worries investors about returns ahead of Amazon results
Microsoft and Meta are stepping up spending to build out AI data centers in a rush to meet vast demand, but Wall Street is hungry for a quicker payday on the billions invested.
Microsoft and Meta both said on Wednesday their capital expenses were growing due to their AI investments. Alphabet, too, reported on Tuesday that these expenditures would remain elevated.
Amazon, which is set to report results after market hours on Thursday, is likely to echo these forecasts.
The extensive capital spending could threaten fat margins at these companies, and pressure on profitability is likely to spook investors.
Big Tech shares fell on Thursday, highlighting the challenges the companies face as they seek to balance ambitious AI pursuits with the need to reassure investors they are focused on short-term results.
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