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...
Quick Summary
US stocks extended losses, with tech and crypto leading the sell-off
Nasdaq 100 suffered its worst three-day drop since April
Bitcoin plunged to around US$64,000, wiping out gains since Trump’s election
Weak US jobs data and AI valuation fears intensified risk-off sentiment
What’s Driving the Sell-Off
A fresh wave of selling hit Wall Street as investors reassessed lofty valuations tied to AI, software and crypto, just as US labour data showed cracks in economic momentum.
The S&P 500 fell 1.2%, while the Nasdaq 100 extended its steepest three-day rout in months. Selling broadened beyond growth stocks, with nine of 11 sectors in the S&P 500 declining.
Tech & AI in the Crosshairs
Big Tech earnings added fuel to the fire:
Amazon sank after flagging even heavier spending on data centres and chips
Microsoft and Alphabet also slid on concerns that massive AI investments may not deliver near-term returns
Narrative shift: Software firms are now increasingly viewed as AI disruption victims, not beneficiaries.
Crypto Hit Hard
Bitcoin tumbled about 12%, one of its sharpest drops on record
The token has lost nearly half its value since October
Leverage unwinds and fund redemptions accelerated the sell-off
Some analysts warn that, historically, bitcoin bear markets have seen drawdowns of up to 80%, though near-term support is eyed around US$60,000.
Jobs Data Adds to Jitters
Risk appetite was further dented after:
US job openings fell to the lowest since 2020
Layoffs rose, and January job cuts hit the highest level since 2009
Jobless claims exceeded expectations
These signals reinforced fears that the labour market is weakening, complicating the outlook for interest rates.
Flight to Safety
US Treasuries rallied, pushing the 10-year yield down to ~4.19%
Silver plunged 16%, while gold also retreated
The US dollar strengthened, adding pressure to risk assets
Market Takeaway
This is no longer a simple sector rotation. According to strategists, the market is seeing outright deleveraging across crowded trades:
AI buildout plays
Software at risk from AI
Crypto and payments
Valuation resets in these heavyweight sectors are now dragging the broader market lower.
Bottom Line
The AI-driven rally is undergoing a brutal reality check.
With earnings uncertainty, heavy capital spending, and signs of economic cooling, investors are demanding proof — not promises — that AI can translate into profits. Until then, volatility is likely to stay elevated, especially in tech and crypto.
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