As the curtain falls on Big Tech earnings, investors are turning their attention to companies reaping the benefits of the AI surge here and now — not later. Microsoft, Alphabet, and Amazon all posted strong earnings fueled by soaring cloud revenue. However, costly AI hardware and infrastructure firms witnessed a downturn following a massive 16-month rally.
- Meta hinted at the necessity of “meaningfully” increased AI spending, which resulted in a 12% boost in its capex range. Even AI “laggard” Apple has recently invested in AI servers.
- According to a recent survey of tech leaders, most don’t believe their infrastructure is “AI-ready,” and 42% don’t expect a return on these AI investments for two years.
AI hype slows: Taiwan’s stock exchange, a bellwether for AI excitement, experienced its largest outflows last month since Oct. 2023 as chipmakers lowered their outlooks. Market sentiments have cooled towards chipmakers such as AMD, which narrowly beat sales expectations but still faced a dip in shares. Same for Super Micro, where revenue missed, although the company remains optimistic about long-term AI demand. However, Nvidia’s upcoming earnings on May 22 will test this hypothesis.
