Earnings Expose Fault Lines in Big Tech’s AI Spending Spree

Wall Street cheered AI-fueled results where they translated into revenue, but punished heavy spending without clear payoffs. Meta’s shares logged their steepest drop in three years on worries about surging capex, while Microsoft slid after cloud growth underwhelmed. Amazon rallied on accelerating AWS demand and new AI commerce initiatives, and Alphabet advanced on stronger cloud and generative-AI sales. With stocks near records after a Fed rate cut, investors are imposing a new discipline: show AI’s contribution to growth, or expect less generosity.

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