FX168 Financial News Agency (North America) reported on Friday (October 31) that, according to CNBC, U.S. technology giants have sent a consistent message during the latest earnings season: artificial intelligence (AI) investments will only grow larger.
The four major internet giants, including Alphabet (Google's parent company), Meta (Facebook's parent company), Microsoft, and Amazon, have all raised their capital expenditure (Capex) forecasts.
The total investment is projected to exceed $380 billion by 2025. Notably, Microsoft’s forecast is based on its fiscal year ending June 2026.
These companies are racing to expand their AI infrastructure to meet what they describe as “virtually limitless demand for AI services.”
However, an increasing number of analysts have begun to question whether this unprecedented investment frenzy is inflating a new tech bubble and whether energy and computing resources can sustain this high-stakes gamble.
Even so, compared to AI unicorn OpenAI’s spending, these tech giants’ expenditures still appear “moderate” — OpenAI recently announced a $1 trillion infrastructure partnership plan with NVIDIA, Oracle, and Broadcom.
Key Highlights from Each Giant’s Earnings Report: Amazon and Google Soar, Meta Plummets
Amazon’s stock surged after the earnings report as the company raised its annual capital expenditure forecast to $125 billion (previously expected at $118 billion), surpassing market expectations.
Chief Financial Officer Brian Olsavsky stated, “We will continue to make significant investments in AI, which represents a tremendous opportunity with long-term high-return potential.”
Alphabet, Google’s parent company, also benefited from the AI boom.
The company raised its capital expenditure forecast to $91 billion to $93 billion (previously $75 billion to $85 billion), and its stock price rose 2.5% on Thursday.
Despite exceeding earnings expectations, Microsoft's stock price fell by approximately 3%.
Earnings reports indicate that Microsoft’s capital expenditure growth for the fiscal year 2025 will accelerate to approximately $94.5 billion (an increase of more than 45% compared to the previous year).
Chief Financial Officer Amy Hood noted that this rate of growth is “significantly higher than previous expectations.”
Meta Platforms emerged as the biggest loser. Despite beating expectations across all metrics, its stock plummeted 11% on Thursday, marking its largest drop in three years. The company narrowed its capital expenditure range to $70 billion to $72 billion, raising analyst concerns over a lack of clear monetization pathways for its AI investments.
“An Uncertain Revenue Story”: Meta’s AI Concerns
Unlike Amazon, Microsoft, and Google, which have cloud computing businesses to support AI applications, Meta’s AI investments are primarily aimed at enhancing ad targeting precision and lack a direct revenue model.
In its report, investment bank Oppenheimer downgraded Meta from “Buy” to “Hold,” citing “uncertain revenue opportunities” associated with its “superintelligence” project.
Meta CEO Mark Zuckerberg announced the establishment of the “Superintelligence Lab” in June and appointed former Scale AI CEO Alexandr Wang and former GitHub CEO Nat Friedman to jointly lead the project.
Zuckerberg stated that the lab will consolidate Meta’s internal AI model teams, aiming to “make personalized superintelligence accessible to everyone.”
However, Oppenheimer noted that this strategy 'almost replicates the cash-burning model of the metaverse from 2021–2022,' during which Meta incurred losses of billions of dollars per quarter in the augmented reality sector.
The latest earnings report shows that its Reality Labs division lost $4.4 billion this quarter, with revenue reaching only $470 million.
Cloud Computing Battle: AI Spending Emerges as a Growth Engine, but Concerns Remain
For other hyperscale cloud providers (Hyperscalers), AI investments are closely tied to cloud infrastructure.
Amazon Web Services (AWS) reported third-quarter revenue of $33 billion, up 20% year-over-year; Microsoft Azure grew by 40%; and Google Cloud increased by 34% to $15.15 billion.
Analysis firm Cantor pointed out, 'Enterprises like Microsoft, which possess a comprehensive cloud service stack, will emerge as the biggest beneficiaries of this round of AI infrastructure expansion.'
However, the report also warned that capital expenditure growth is concerning: total capital expenditure, including leases, is projected to reach $140 billion in 2025, a 58% increase year-over-year, nearly triple the amount in 2024.
Cantor analysts commented, 'While this reflects robust demand, it also indicates that the 'spending fever' has yet to abate.'
