Quick Take Big Tech’s 2026 capital spending plans have blown past expectations , sparking a sharp market reaction. Investors still believe in AI — but they now want clear proof of returns , not just long-term promises. The CapEx Shock Across recent earnings, mega-cap tech companies pushed 2026 CapEx from “already massive” to “historically extreme” : Meta Platforms : US$115–135B vs US$110B consensus Stock jumped ~10% initially, but gains faded → investors want evidence, not AI rhetoric Microsoft : US$140–150B vs US$109B consensus Stock fell ~10% → ROI timing now under scrutiny Alphabet : US$175–185B vs US$115B consensus Shares slipped as markets adjusted to a more capital-intensive Google Amazon : ~US$200B vs US$146B consensus Stock dropped ~11% after-hours on cash flow concerns What Investors Are Really Worried About This is no longer about believing in AI — it’s about financial optics and timing . Key Market Fears CapEx is rising fa...
Summary
Wall Street’s most popular trades — tech stocks, AI plays, gold and cryptocurrencies — are all unwinding at the same time after a sharp market sell-off. There was no single trigger. Instead, stretched valuations, AI disruption fears, heavy capex plans, and weakening labour data combined to spark a broad retreat from risk.
What’s Driving the Sell-Off
Crowded trades are being abandoned as investors turn defensive.
AI optimism is being questioned, especially as new models threaten existing software businesses.
Massive AI spending plans from Big Tech are raising concerns about overspending and future returns.
Weak US labour data added fears that economic momentum may be slowing.
Valuations across risk assets had run too far, too fast.
Market Impact at a Glance
S&P 500 fell 1.2%, marking its third straight daily decline
Nasdaq 100 saw its worst slide since April
Silver collapsed ~20%
Bitcoin plunged over 13%, erasing all gains since Trump’s election
Amazon sank more than 11% after announcing US$200 billion in AI capex
US Treasuries rallied as investors fled to safety
Why This Feels Different
Unlike previous sell-offs driven by a single shock, this move reflects a slow erosion of confidence. Investors are no longer rotating between sectors — they are cutting risk outright.
“It’s more shoot first, ask questions later.”
Big Picture
AI remains a long-term growth theme, but near-term winners and losers are being reassessed
Momentum trades are fragile when exits get crowded
Markets are undergoing a valuation reset, not a collapse — but volatility may persist
“Momentum may have just strung itself out.”
Bottom Line
This is less about panic and more about reality catching up with hype. Investors are re-pricing risk across assets that had become too popular, too expensive, and too consensus.
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