"The S&P 500 Index jumped 16% in 2025, with AI winners Nvidia Corp., Alphabet Inc., Broadcom Inc. and Microsoft Corp. contributing the most. But at the same time, concerns are mounting about the hundreds of billions of dollars Big Tech has pledged to spend on AI infrastructure. Capital expenditures from Microsoft, Alphabet, Amazon.com Inc. and Meta Platforms Inc. are expected to rise 34% to roughly $440 billion combined over the next year, according to data compiled by Bloomberg."
"Throughout history, over-investment has been a common theme when there's a technological advancement that will transform society, according to Invesco chief global market strategist Brian Levitt, who pointed to the development of railroads, electricity and the internet. This time may be no different. "At some point the infrastructure build may exceed what the economy will need over a short period of time," he said. "But that doesn't mean that the rail tracks weren't finished or the internet didn't become a thing, right?""
The S&P 500 Index rose 16% in 2025, led by Nvidia, Alphabet, Broadcom and Microsoft. Combined capital expenditures from Microsoft, Alphabet, Amazon.com and Meta are expected to increase roughly 34% to about $440 billion over the next year. OpenAI has committed to spending more than $1 trillion on AI infrastructure despite not being profitable, and some arrangements involve investments cycling between OpenAI and several public tech giants. Historical technological shifts often produce over-investment in infrastructure before demand catches up. Rising equity valuations after consecutive double-digit years increase concern about potential downside if AI underdelivers.
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