US technology heavyweights showed mixed trading in premarket on Thursday, April 30, as investors assessed March quarter earnings and updated artificial intelligence spending plans. According to reports from Live Mint, Alphabet jumped 7% after beating Street estimates, while Amazon gained 3% following its earnings report. However, Microsoft dipped 1% after growth in its cloud-computing business fell short of elevated expectations, and Meta Platforms tumbled 8% amid fresh concerns over aggressive spending plans. S&P 500 futures climbed 0.40% higher and Nasdaq 100 futures were up 0.93% as of 8:26 p.m. ET, while Dow Jones futures slipped 0.32% overnight. The mixed performance reflects investor uncertainty about the sustainability of Big Tech's massive AI investments.
The four cloud-computing giants have significantly ramped up AI spending this year, with their combined outlays now set to surpass $700 billion this year. As reported by Live Mint, this marks a two-thirds increase from 2025 levels and represents an AI spending bill larger than the entire GDP of Switzerland. Amazon reported quarterly capital expenditure that came in above analysts' expectations as it continued expanding data center capacity, being the only one among the four major data center developers to keep its annual capex target unchanged at $200 billion. Microsoft forecast unveiled plans for 2026 capital spending of $190 billion, while Meta raised its 2026 capex target by another $10 billion to around $145 billion. The latest results from Meta and Microsoft have further stoked investor concerns about unsustainable AI spending without commensurate returns.
Meta reported its first-ever quarterly decline in Daily Active People (DAP) since it began using the metric to track users across its social media platforms. According to Live Mint, the company attributed the decline to internet disruptions in Iran and restrictions on access to WhatsApp in Russia. To offset part of its AI spending burden, Meta has recently introduced cost-cutting measures, informing employees through an internal memo that it would cut roughly 8,000 jobs and leave another 6,000 open roles unfilled. The company offered limited clarity on how its increased spending would translate into shareholder returns while also warning of rising costs and capacity constraints. Meta raised its capital expenditure guidance for the year, reigniting fears about unsustainable investments without commensurate returns.
Market reaction to Big Tech's AI spending commitments suggests investors are becoming more selective, rewarding only those companies showing visible returns from their hefty AI investments. As reported by Live Mint, investors are closely examining the underlying performance of businesses linked to AI investments, with the four cloud-computing giants often referred to as hyperscalers accounting for more than a fifth of the S&P 500's total market capitalisation. The latest results from Meta and Microsoft have intensified this selectivity, with investors questioning whether the massive capital expenditure increases will translate into meaningful returns for shareholders.
