Big Tech’s AI Spending Spree Sparks Mixed Market Reactions
Microsoft, Alphabet, and Meta Platforms reported stronger-than-expected earnings, yet investor focus zeroed in on soaring capital expenditures. The tech giants are funneling billions into artificial intelligence infrastructure, with Alphabet alone increasing its 2025 capex guidance by $10-$12 billion to $91-$93 billion.
Market responses diverged sharply. Alphabet shares jumped 6.7% after crossing $100 billion in quarterly sales, while Microsoft dropped 4% on OpenAI-related costs and Meta fell 7.5% due to a massive tax charge. The spending surge reflects an industry-wide scramble to dominate cloud services and AI development, particularly around Alphabet's Gemini models and Google Cloud expansion.