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AI Capex Boom Splits the Market as Alphabet and Amazon Win Favor, Meta Draws Fire

Markets are now favoring companies that demonstrate clear AI monetization.

Overview

  • Alphabet posted its first $100 billion revenue quarter and lifted full‑year capital spending guidance to about $92–93 billion as management said AI demand exceeds supply.
  • Google reported 34% growth in cloud revenue, a $155 billion cloud backlog, and strong uptake of Gemini, which management said has roughly 650 million monthly users.
  • Meta raised 2025 capital expenditures to roughly $70–72 billion and signaled an even larger outlay in 2026, sending its shares down more than 10% as several banks cut price targets.
  • Amazon said it would be very aggressive in expanding data centers, with capital expenditures of about $125 billion this year and more next year, as AWS growth reaccelerated on AI workloads.
  • Policymakers flagged financing risks from the sector’s spending spree that topped $360 billion over the past year, even as the Fed’s Jerome Powell said today’s AI buildout does not resemble the 1990s dot‑com bubble.