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Investors Eye Big Tech's AI Spending Amid Mixed Earnings Reports

KVIA•Monday, May 4, 2026 at 11:58 AM•CNN Newsource

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AI Summary

Big Tech companies, including Amazon, Alphabet, Meta, and Microsoft, are projected to exceed $700 billion in artificial intelligence spending this year as they compete for dominance in the sector. However, Wall Street is increasingly scrutinizing these expenditures, especially after recent earnings reports revealed contrasting results. Alphabet's stock surged 10% due to its ability to monetize AI, while Meta's shares fell nearly 9% as it lacks a cloud revenue stream. The market is now focused on identifying clear winners and losers in the AI space, with Alphabet's shares up nearly 40% this year. Investors are cautious about spending that lacks immediate returns, indicating a shift in market sentiment towards tech investments.

Key Details: • Alphabet plans to increase AI spending and has a backlog of $460 billion in deals. • Meta is raising its AI budget by at least $10 billion but lacks cloud revenue. • Alphabet's shares have risen nearly 40% this year, while Meta's shares are down 7%. • Investors are becoming less patient with tech companies' spending without tangible results.

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