Investors in AI hyperscalers are set to digest yet another huge quarter of capital expenditures when results begin to trickle in later this month.
The unanswered question: Are the free-spending ways of tech execs finally reflected in the much lower stock valuations of their companies?
Big Tech capital expenditures/sales are expected to reach an all-time peak in the third quarter of this year, Barclays strategists pointed out in a new note (chart below). That essentially means aggressive AI spending continues to yield limited impact on sales and, by extension, profits.
Concerns in the market about hyperscaler capital expenditures aren't too hard to find.
All "Magnificent Seven" stocks have underperformed the S&P 500 (^GSPC) in 2026 except for Alphabet (GOOG, GOOGL), which has notched a 15% year-to-date gain versus the benchmark index's 9.5% advance.
The unanswered question: Are the free-spending ways of tech execs finally reflected in the much lower stock valuations of their companies?
Big Tech capital expenditures/sales are expected to reach an all-time peak in the third quarter of this year, Barclays strategists pointed out in a new note (chart below). That essentially means aggressive AI spending continues to yield limited impact on sales and, by extension, profits.
Concerns in the market about hyperscaler capital expenditures aren't too hard to find.
All "Magnificent Seven" stocks have underperformed the S&P 500 (^GSPC) in 2026 except for Alphabet (GOOG, GOOGL), which has notched a 15% year-to-date gain versus the benchmark index's 9.5% advance.
3 months ago
