A Bloomberg Technology segment highlighted growing investor unease over the surge in artificial intelligence–related capital expenditures, a trend that is increasingly shaping the performance of major technology stocks including Microsoft, Meta, Tesla, and Apple. Markets Reel Amid AI Spending Fears The discussion opened with a sharp market selloff, as the NASDAQ 100 posted its worst day since November. The decline was driven by heavy losses in large-cap technology stocks alongside notable volatility in cryptocurrencies, underscoring broader market anxiety about the cost and pace of AI investment. Microsoft Hit by Capex and Cloud Growth Concerns Microsoft bore the brunt of investor skepticism after reporting higher capital expenditures alongside signs of decelerating growth in its Azure cloud business. The reaction was swift and severe, erasing approximately $429 billion in market value. Goldman Sachs analyst Gabriella Borges described the selloff as a classic trade-off: short-term market discomfort versus long-term strategic positioning. She noted that Microsoft’s spending is aimed at strengthening its AI ecosystem, including Copilot and internal research and development, even if near-term returns remain uncertain. Meta Rallies on Strong Fundamentals In contrast, Meta’s heavy AI spending was met with investor approval.
The company reported strong overall growth, particularly in its advertising business, which helped justify its rising capital expenditures. The result was Meta’s largest stock jump since July. Wolf Research analyst Schweta Khajuria pointed to an acceleration across Meta’s core business lines, suggesting that AI investments are already translating into tangible performance gains. Tesla Eyes ‘Terrafab’ to Power AI Ambitions Tesla also drew attention after CEO Elon Musk unveiled plans for a massive in-house chip manufacturing facility, dubbed a “Terrafab.” The proposed factory would require an estimated $20 billion in capital spending and aims to ease chip supply constraints. ARK Invest analyst Tasha Keeney framed the move as central to Tesla’s long-term robo-taxi strategy, arguing that the company’s cost structure and data advantage could give it an edge over rivals such as Waymo. Software Firms Struggle to Convince Markets Elsewhere in the software sector, executives from SAP and ServiceNow emphasized how AI is enhancing their product offerings. Despite those assurances, both companies saw their shares fall sharply, reflecting persistent market skepticism about AI monetization and the broader challenges facing enterprise software companies. Apple Faces Questions Over AI Leadership Apple’s position in the AI race also came under scrutiny. Bloomberg’s Mark Gurman noted that, while Apple continues to post strong financial results, it is widely perceived as lagging behind peers in AI development and new product innovation. He suggested that Apple’s current success could be masking longer-term risks if the company fails to accelerate its AI strategy. Bridging Tech and Policy in the AI Era The segment concluded with a discussion of the Hill and Valley Forum, where co-founders Christian Garrett and Delian Asparoh outlined efforts to connect technology leaders with policymakers. They stressed the importance of sustained collaboration to maintain technological, industrial, and alliance leadership in the AI era—regardless of political shifts in Washington. Overall, the report underscored a central tension facing the tech sector: while AI promises transformative long-term growth, the massive investments required are testing investor patience and reshaping market dynamics in the near term.
Bloomberg Tech
