Big Tech capex approaches $100 billion and Dan Ives loves it

AI spending shows no signs of flagging.

Amazon, Alphabet, Meta, and Microsoft are approaching a record combined capex spending of nearly $100 billion for the quarter ended in September, as the tech giants plow ahead on AI spending. Their guidance for next year suggests this chart will keep going up and to the right:

Amazon, which reports earnings today, is the only one not expected to hit record purchases of property and equipment for the quarter. The FactSet analyst consensus estimate pegs Amazon’s capital expenditure at $31.9 billion in Q3, down slightly from the $32.2 billion it posted in Q2. (The other companies all reported yesterday.)

For what it’s worth, Wedbush Securities analyst and AI booster Dan Ives loves it. In a trio of notes after earnings, Ives praised their AI spending.

Here’s what he said about Meta:

“While the ultimate level of investment contemplated this year has increased, we believe the spending has been justified, with the infusion of AI capabilities across the company’s ad stack and content recommendation engines driving tangible results for Meta’s Family of Apps and Reality Labs.”

Microsoft:

“MSFT provided another quarter of strong guidance for FY2Q26 as it remains clear that FY26 remains the true inflection year of AI growth for Microsoft with CIOs lining up behind the red ropes to build for deployments in Redmond as the company invests aggressively to capture this opportunity.”

And Alphabet:

“In our view, 3Q performance further validates Alphabet’s position as a leading AI beneficiary, with management already observing tangible results across advertising and cloud.”

On Wednesday, Wedbush announced that the Dan IVES Wedbush AI Revolution ETF, which holds the 30 companies Ives considers the best positioned to cash in on the ongoing boom, surpassed $1 billion in assets under management in less than five months.

#10

Rani Molla2h

Tesla just recalled its beleaguered Cybertruck for the 10th time since the vehicle was introduced two years ago. This time the company recalled about 6,000 of the “apocalypse-proof” vehicles due to what the National Highway Traffic Safety Administration says is an improperly installed “optional off-road light bar accessory” that could become disconnected from the windshield while driving, and could “create a road hazard for following motorists and increase their risk of a collision.”

CEO Elon Musk once said he could sell up to 500,000 of the stainless steel behemoths a year. In the first three quarters of this year, the company has sold only about 16,000.

Jon Keegan

FUNGIBLE FLEET

Microsoft: Forget what we said, we are going to keep spending on capex

Last quarter, the company offered guidance that its capex spending would be lower in the second half of the fiscal year. Yesterday it said spending would go up.

Microsoft Celebrates Its 50th Anniversary With Copilot AI Event

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Analysts lower Meta price targets after social media giant says AI capex will keep climbing

Meta may have posted record revenue Wednesday but the stock is deeply in the red in the wake of its third-quarter earnings report, after the social media company said that its capital expenditure on AI would continue to rise.

The earnings prompted a number of analysts to lower their price targets or downgrade the stock.

RBC Capital lowered its price target to $810 from $840. Bank of America Securities lowered its price target to $810 from $900. Barclays, JPMorgan, Deutsche Bank, and Wells Fargo also lowered their price targets on the company.

Earlier today, Benchmark downgraded its rating to a “hold” from a “buy.” Oppenheimer downgraded the company to “perform” from “outperform,” saying the “significant investment in Superintelligence despite unknown revenue opportunity mirrors 2021/2022 Metaverse spending.” Ouch.

Rani Molla

Apples to apples

Apple is becoming more of a services company and less a product company

Apple reports earnings Thursday.