Tech giants are intensifying their investments in artificial intelligence, fueling an industry boom that has driven stock markets to unprecedented heights. Fresh earnings reports from Meta, Alphabet, and Microsoft underscore the immense sums being poured into AI infrastructure—from data centers to advanced chips—despite lingering doubts about the speed of returns.
Meta announced that its 2025 capital expenditures will range between $70 billion and $72 billion, slightly higher than its earlier forecast. The company also revealed plans for substantially larger spending growth in 2026 as it seeks to compete more aggressively with players like OpenAI.
During a call with analysts, CEO Mark Zuckerberg defended Meta’s aggressive investment strategy, emphasizing AI’s transformative potential in driving both new product development and enhancing its core advertising business. He described the firm’s infrastructure as operating in a “compute-starved” state and argued that accelerating spending was essential to unlocking future growth.
Alphabet, parent to Google and YouTube, also raised its annual capital spending outlook to between $91 billion and $93 billion—up from $85 billion earlier this year. This nearly doubles what the company spent in 2024 and highlights its determination to stay at the forefront of large-scale AI development.
Microsoft’s quarterly report similarly showcased its expanding investment efforts. The company disclosed $34.9 billion in capital expenditures through September 30, surpassing analyst expectations and climbing from $24 billion in the previous quarter. CEO Satya Nadella said Microsoft continues to ramp up AI spending in both infrastructure and talent to seize what he called a “massive opportunity.” He noted that Azure and the company’s broader portfolio of AI tools are already having tangible real-world effects.
Investor enthusiasm surrounding these bold AI commitments has helped lift the share prices of all three firms above the broader S&P 500 index. Still, Wall Street remains keenly interested in seeing whether these heavy capital outlays will translate into measurable profits.
Bank of America senior economist Aditya Bhave observed that robust consumer activity and AI-driven business investment have been the key pillars supporting U.S. economic resilience. As long as the latter remains strong, he said, it signals continued GDP growth. Despite an 83 percent profit drop for Meta due to a one-time tax charge, Microsoft and Alphabet reported profit increases of 12 percent and 33 percent, respectively.
