As soon as the 2025 earnings season kicked off, the tech giants staged a "two heavens of ice and fire".
Although the recent earnings reports of tech giants have been mixed and stock prices have reacted differently, one signal is very clear: all large companies are spending money on AI. After the giants announced their earnings reports:
Google's parent company Alphabet rose 5% due to accelerated revenue growth in various businesses; Although Meta made more money than expected, its stock price fell 8% because it spent too much money; Microsoft's performance is basically up to standard, and its stock price has fallen by more than 2%.
On the surface, stock prices rise and fall, but there is one thing in common: capital expenditure (that is, "spending money") is skyrocketing.
Both Google and Meta have raised their spending plans for 2025 and predict that they will spend more in 2026: Google expects to invest between $91 billion and $93 billion next year; Meta expects to invest between $70 billion and $72 billion; Microsoft's just-concluded fiscal quarter spent a record $34.9 billion, far exceeding market expectations.
This round of "money burning war" is ultimately to grab the future of AI and cloud computing. Data centers, AI chips, and computing infrastructure are all expensive, but no one dares to fall behind.
For investors, this is both a good thing and shows that the company is confident in the future; But it's even more challenging, how long will it take to earn back so much money?
Google and Meta: Spend more money and bet on the future of AI
In the "arms race" of AI infrastructure, Google and Meta have made it clear that they will spend more money to get ahead of the AI era.
Google's parent company Alphabet announced that it is expected to spend between $91 billion and $93 billion in 2025, far exceeding the previous estimate of $85 billion. This is the second time this year that the spending plan has been raised. More importantly, the company's finance director said that more will be spent in 2026, and expenses will "increase significantly".
Why is it so fierce? Because Google Cloud business demand is too strong!
This quarter, its backlog soared 46% month-on-month, totaling $155 billion. Customers are queuing up to use its AI computing power and cloud services, and Google must quickly build data centers and buy servers.
Meta is the same: raising its capital expenditure forecast for 2025 from $660-72 billion to $700-72 billion. The company also "vaccinated" in advance: the investment growth in 2026 will be greater than in 2025, and the overall expenditure growth rate will also accelerate. It is mainly spent on data centers, AI hardware, cloud computing and equipment depreciation.
However, Meta's frank statement that "it will spend more money in the future" has made investors worry that profits will be affected, and its stock price fell directly after the earnings report was released.
To put it simply, both companies are frantically investing in the future of AI. Google has too many orders and has to expand production; Meta is fully betting on the metaverse and AI and laying out in advance. Although short-term stock prices are under pressure, their goal is clear: to spend more now so that they don't fall behind in the future.
Microsoft: Spending has exceeded expectations, exposing that supply cannot keep up with demand
Unlike Google and Meta, which are still announcing "more money in the future", Microsoft has already spent money, and more than everyone thinks.
According to an internal memo obtained by Business Insider, Microsoft CFO Amy Hood revealed that
in the first fiscal quarter (as of September), the company's capital expenditure reached $34.9 billion, a record high, far exceeding market expectations of $30 billion.
"Customer demand is growing faster and faster, and we must invest more to seize future opportunities," she said in the memo. But the strange thing is that the more money is spent, the stock price does not rise but falls - after the earnings report, Microsoft's stock price fell by more than 3%.
Why? Because the market is starting to worry: it's not that Microsoft doesn't want to make more money, but that it "can't afford". The demand for AI and cloud computing is too fierce, and Microsoft is desperately trying to build data centers and buy AI chips, but it still can't keep up with the speed that customers want. Investors began to doubt:
How long will it take to pay for such a big investment? Will burning money desperately now affect future profits?
Therefore, this "exceeding expectations" expenditure shows that on the one hand, Microsoft is sprinting to AI; On the other hand, it also exposes a practical problem: the global AI computing power is seriously in short supply, and the supply cannot keep up with the demand.
To put it simply, Microsoft doesn't want to make money, it's because there are too many customers and too few equipment, so it can only spend money to grab the territory first. But whether this big gamble can be won, the market is still waiting to see.
Jingtai Views| Is it worth the AI gamble?
Tech giants are desperately spending money on AI, which draws a "blueprint for the future" for investors: AI is not a concept, but really making money, having customers, and having demand.
Where is the opportunity?
Google Cloud revenue rose 32% in one year;
It has signed billions or even tens of billions of dollars in large contracts with companies such as Anthropic and Meta;
Its AI assistant, Gemini, is now used by 650 million people every month.
All of this shows that AI has begun to be monetized, and the market is really coming. But the risks are also obvious. Meta and Microsoft's stock prices fell after earnings reports, indicating that investors began to worry: money was spent too much and too fast, when will it be earned back? Tens of billions of dollars in investment at every turn, not a small amount.
Wall Street is now generally asking: Are these AI projects a "future gold mine" or a "bottomless pit"? This round of earnings clearly shows that all tech giants are playing the next big game - who can be the boss in the AI era. They build data centers, buy chips, and grab customers at any cost to seize the opportunity.
Although stock prices are now up and down, they are surprisingly consistent in "spending money". This means that in the next few years, the global technology infrastructure will be completely rewritten. The biggest challenge for investors is to see long-term growth opportunities while also bearing the pressure of high costs
This AI gamble has just begun.
