Post by : Bianca
Haleem
Alphabet, Microsoft and Meta on Wednesday detailed plans to increase capital spending on artificial intelligence and data-centre capacity, but investors reacted unevenly — favouring Google’s parent company over its peers.
Shares of Alphabet climbed more than 7% after the announcements, while Microsoft edged down about 3% and Meta fell roughly 7% in premarket trading, underscoring divergent investor sentiment.
The gap reflects differences in how the companies are funding expansion. In the September quarter, Alphabet recorded $23.95 billion in capital expenditures, roughly half of its cash generated from operations. By contrast, Meta’s capex represented 64.6% of operating cash flow and Microsoft’s reached 77.5%.
Those ratios have reassured some investors concerned about shrinking free cash flow as firms pour billions into compute and infrastructure to support AI workloads.
Meta CEO Mark Zuckerberg acknowledged the business may absorb short-term losses from heavy investment in AI, while Microsoft is relying on its cloud platform and partner relationships to sustain growth despite mounting costs.
For now, Alphabet is seen as the most financially resilient contender, supported by steady revenue growth and substantial cash reserves, which may better absorb the high costs of building AI infrastructure.
With Amazon set to report results next, markets will be watching to see whether another major tech update bolsters confidence or adds to concern about the sector’s capital intensity.
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