Real Estate
Home›Real Estate›Industry›Big Tech data center spending splits Wall Street as AI…
Big Tech data center spending splits Wall Street as AI capex scrutiny rises
Investors are increasingly demanding evidence that large AI infrastructure outlays can translate into returns, as debt-backed hyperscale capex is expected to reach about $400B over the next 18 months.
Microsoft, Amazon and Google reported surging cloud revenue last quarter, but Wall Street’s reactions to their AI and data center spending plans have diverged sharply, underscoring growing impatience for proof of returns on the AI infrastructure buildout, according to Bisnow citing the companies’ results and market response.
Bisnow reports that Google’s larger-than-expected jump in spending triggered a sell-off that pushed Alphabet shares down more than 7%, while Amazon’s similar spending increase was met with enthusiasm and lifted its shares by as much as 15%. Microsoft, by contrast, left its capital expenditure plans unchanged, and the outlet says the company logged the largest single-day market value gain for a U.S. firm.
The piece ties the uneven market verdicts to a broader shift away from rewarding or punishing spending amounts alone, as investors seek clearer explanations and evidence that massive expenditures on data centers and chips can fit into a credible path to AI profitability. Bisnow also notes expectations that as much as $400B in debt could help fund hyperscale capex over the next 18 months.
Despite the scrutiny, Bisnow says the AI buildout is still supporting rapid cloud growth, with the global cloud market up 43% in the second quarter, its fastest pace in eight years, and AI-specific cloud services growing 165% year over year, according to Synergy Research Group.