Big US tech stocks swing as investors probe AI spend
The share prices of the biggest US tech firms swung up and down as investors considered their immense spending on artificial intelligence (AI). Facebook's owner Meta, Google's owner Alphabet, Microsoft, and Amazon reported their first-quarter results on Wednesday. Meta's shares slumped over 5% in after-hours trading due to plans to increase capital expenditure to $145bn (up from $135bn), citing underestimation of compute needs. Mark Zuckerberg acknowledged uncertainty in monetization but expressed confidence in Meta's AI lab. Alphabet's stock surged nearly 6% after revealing plans to significantly increase AI spending to $185bn this year, with Google Cloud AI usage driving a 63% growth. Sundar Pichai highlighted Alphabet's competitive edge in AI models and chips. Microsoft's stock fell 2% despite a 16% revenue increase and 23% profit rise, as AI spending strained free cash flow ($15.8bn, down $6bn from a year ago). Satya Nadella noted a $37bn annual run rate for AI business but did not specify base sales. Microsoft's stock is down 11% year-to-date due to AI spending concerns and its $10bn investment in OpenAI. Amazon's shares fell after reporting a 15% year-over-year profit increase and a 28% growth in cloud business, despite earlier plans to spend $200bn on AI (up from $125bn in 2025). Andy Jassy emphasized Amazon's AI chip manufacturing growth ($20bn annual run rate) and leadership position in AI-driven transformations.
Source: BBC