The spending plan of up to about 600 billion USD for artificial intelligence (AI) of large technology corporations in 2026 is significantly increasing investors' concerns, as the market questions the profitability and sustainability of this investment wave.
In the past week, the decline in stocks related to AI has put pressure on the global stock market. The global stock index is expected to fall by about 0.33% in the week, reflecting a cautious sentiment in the face of excessive spending risks by technology giants.
Amazon is one of the focuses of attention after announcing a capital spending plan of up to 200 billion USD, causing the company's stock to fall 7% in the last trading session of the week.
Alphabet, Google's parent company, also recorded a 3% decrease after revealing the possibility of doubling capital spending this year.
Meta Platforms fell 1.3% amid investor concerns that AI costs would affect profit margins.
However, not all technology stocks went down. Nvidia benefited greatly from AI chip demand when it increased by 7%, Microsoft increased by 1% and Tesla increased by 4%. The S&P 500 index (the stock index tracking the performance of the 500 largest listed companies in the US) increased by 1.6%, while the Nasdaq electronic stock exchange increased by 2%.
According to Andrew Wells, Investment Director at SanJac Alpha (Houston), the market is gradually changing its view of AI.
Investors do not think the AI trend is over, but accelerating future profit recovery without adequately assessing risks is becoming too expensive," Andrew Wells said.
In the opposite direction, Nvidia CEO Jensen Huang said that the strong wave of spending is a reasonable response to the "sky-high" demand for AI technology. He emphasized that this trend can be maintained for a long time thanks to strong market demand.
However, software and data analysis companies are under great pressure, as investors fear they may be threatened by increasingly powerful AI models.
Thomson Reuters shares fell another 0.7% after a record drop earlier this week, while RELX lost 4.6% and recorded the worst week since 2020.
The S&P 500 software and service index fell nearly 8% in the week, causing about 1,000 billion USD of market capitalization to evaporate since the end of January.
According to Carlota Estragues Lopez, a strategist at St. James's Place (London), headlines that once pushed AI stock prices to record levels are now being rated much more cautiously.
Ms. Lopez believes that the concern is not only about investment profits, but also about the risk of the market being dominated by a few large-cap technology corporations, limiting competition and scalability.
