All articles tagged with #capital expenditure
Meta Platforms plans to cut about 8,000 jobs (roughly 10% of its workforce) and halt filling 6,000 open roles as it doubles down on AI, lifting its 2026 capex forecast to as much as $145 billion and signaling a shift toward lean costs amid an aggressive AI buildout.
Meta Platforms CEO Mark Zuckerberg said the company’s layoffs were driven by aggressive capital spending on infrastructure and other long-term investments, such as data centers, and that they would continue cost-cutting measures. He did not rule out additional job cuts if expenses don’t align with revenue trajectories, signaling ongoing belt-tightening at the tech giant.
Analysts now expect AI-related capital expenditures to exceed $1 trillion by 2027 as Alphabet, Amazon, Microsoft and Meta disclose large buildouts; 2026 capex is projected to reach $800–$900 billion, with Google Cloud backlog surging and cloud revenue growth supporting monetization. The spending fuels demand for chips and data-center infrastructure, even as investors weigh ROI and remain cautious about Meta’s returns, making the AI capex cycle a key driver for chipmakers and infrastructure providers.
Meta Platforms’ stock fell after its Q1 results as the company raised its 2026 AI-spending forecast to about $125 billion to $145 billion, signaling a steep push into AI infrastructure that could pressure near-term margins but aims to fuel long-term growth.
Tesla posted a Q1 profit of $477 million on $22.39 billion in revenue (below expectations) as car sales rebounded; CEO Elon Musk outlined a hefty investment push into self‑driving taxis, humanoid robots (Optimus) and AI infrastructure, with capital expenditure forecast above $25 billion this year, signaling a shift toward services and automation even as traditional EV sales slow and competition heats up.
Amazon CEO Andy Jassy defends roughly $200B in capex planned for 2026, arguing demand and economics justify bets on AI, custom chips, and related initiatives. He notes AWS AI revenue at about a $15B annual run rate and internal chips revenue above $20B, with two large customers seeking all Graviton capacity in 2026 (which Amazon declined). The letter frames AI as a once-in-a-lifetime opportunity, acknowledges a drop in free cash flow due to capital spending, and highlights progress across grocery, satellite broadband, Now delivery, Alexa+, and Zoox, while signaling possible external sales of chip racks and broader robotics opportunities. Trainium deployments are advancing, underscoring that Amazon’s “Day 1” strategy remains to invest heavily for long-term leadership.
A Seeking Alpha Sell rating flags Amazon for aggressive $200B capex, negative free cash flow projections, and rising debt, with Q4 revenue beating on EPS miss and weak Q1 guidance; AWS growth lags peers while macro headwinds threaten retail; intrinsic value is about $137.94 per share, roughly 30.8% below the current price, signaling further downside risk.
Micron Technology posted solid earnings driven by AI demand but announced a large capex/spending plan to expand capacity, sending MU stock down roughly 5% as investors weighed the growth outlook against the heavier-than-expected spending outlook.
Micron beat fiscal Q2 estimates on AI-driven demand, but shares fell about 4% after hours as management signaled a large capex push (>$25 billion in 2026 with more in 2027) and analysts offered mixed views on margins and pricing as supply tightness eases. TipRanks shows a Strong Buy consensus with 24 Buy and 2 Hold, and an average 12-month target of about $473, signaling modest upside amid divergent views on the stock’s next move.
Five US tech giants are set to spend about $700 billion on data-centre capex to power AI, a figure larger than last year’s oil-and-gas investment, signaling the early onset of AI financialisation as investors back the infrastructure and anticipate a new wave of AI-linked securities, hedges and collateral.
Amazon unveiled plans to invest about $200 billion in AI infrastructure, robotics and related technologies in 2026, triggering a roughly 9% drop in its stock as investors weigh potential long-term returns against cash-flow concerns amid a wave of big AI investments from peers.
A global surge in AI infrastructure spending is accelerating, led by Amazon’s plan to invest about $200 billion in capex this year. This beacon of demand is lifting data-center and neoscaler players, stipulating higher chip and memory prices as hyperscalers and cloud providers like Google, Microsoft, and others expand capacity. Memory prices have surged 28–35% in early 2026, reinforcing the push for suppliers like Nvidia, Broadcom, AMD, Micron, and Sandisk, while cloud backlogs across AWS, Google, and Microsoft total about $1.1 trillion. Analysts expect 2026 capex to rise roughly 50% for the big four (Amazon, Alphabet, Microsoft, Meta), underscoring a sustained AI hardware boom and reshaping the supply chain for the year ahead.
Alphabet posted solid fourth-quarter results, with Google Cloud revenue up 48% year over year and margins improving, but it forecast 2026 capital expenditures of $175–$185 billion—far above consensus around $115 billion—indicating a heavy investment push into cloud/AI that pressured the stock.
Alphabet topped estimates but guided 2026 capex at $175–$185B, sending shares lower after hours; AMD tumbled about 17% on weak Q1 guidance, dragging AI names and weighing tech stocks. Major indices were mostly lower (Nasdaq/S&P 500 down) with the Dow modestly up. Other headlines included Panama’s port license ruling, U.S. plans mineral price floors with Mexico/EU/Japan, and ongoing policy discussions affecting markets.
ASML reported fourth-quarter bookings of €13.16 billion, up 86% and well above estimates, as AI-related demand boosted both memory and logic‑chip equipment. The Netherlands‑based company posted €2.89 billion profit on €9.72 billion in sales, guided 2026 sales to €34‑39 billion with a 51‑53% gross margin, and unveiled a buyback of up to €12 billion through 2028 plus a 17% dividend increase to €7.50 a share. In the same period SK Hynix signaled a substantial increase in capital expenditure after a 90% rise in Q4 profit and a 66% jump in revenue, driven by AI workloads and memory demand; both companies reflect a robust AI‑driven semiconductor cycle.