Shares of US technology heavyweights such as Alphabet, Amazon, Meta Platforms, and Microsoft, which together account for more than a fifth of the S&P 500’s total market capitalisation, were trading mixed in premarket trade on Thursday, 30 April, as investors assessed their March quarter earnings and updated artificial intelligence spending plans.
Alphabet jumped 7% in premarket trading after beating Street estimates, while Amazon also moved higher by 3% following its earnings report. Microsoft Corp is trading with a modest 1% gain after growth in its cloud-computing business fell short of elevated expectations, while Meta Platforms tumbled 8% amid fresh concerns over its aggressive spending plans.
The four cloud-computing giants, often referred to as hyperscalers, have further ramped up AI spending this year.
However, market reaction to these spending commitments, as well as the underlying performance of the businesses linked to them, suggests investors are becoming more selective, rewarding only those companies that are showing visible returns from their hefty AI investments.
Big Tech’s AI bet swells to $700 billion
All four US tech giants that reported results on Wednesday indicated that spending on artificial intelligence would not slow anytime soon, with their combined outlays now set to surpass $700 billion this year.
That marks a two-thirds increase from 2025 levels and, taken together, represents an AI spending bill larger than Switzerland’s entire GDP.
Amazon reported quarterly capital expenditure above analysts’ expectations as it continued expanding data centre capacity. It was the only one among the four major data centre developers to keep its annual capex target unchanged at $200 billion, although the March quarter surge in spending significantly reduced its free cash flow.
Microsoft forecast unveiled plans for 2026 capital spending of $190 billion. Meta, meanwhile, raised its 2026 capex target by another $10 billion to around $145 billion but offered limited clarity on how that spending would translate into shareholder returns while also warning of rising costs and capacity constraints.
To offset part of its AI spending burden, Meta has recently introduced several cost-cutting measures. Last week, it informed employees through an internal memo that it would cut roughly 8,000 jobs and leave another 6,000 open roles unfilled.
Adding to investor concerns, Meta also reported its first-ever quarterly decline in Daily Active People (DAP), a metric it began using to track users across its social media platforms. The company attributed the decline to internet disruptions in Iran and restrictions on access to WhatsApp in Russia.
(With inputs from Bloomberg and Reuters)
Disclaimer: We advise investors to check with certified experts before making any investment decisions.
