"For two decades, the playbook for Big Tech was fairly simple and extremely successful: Create disruptive innovations, deliver blinding growth rates and keep a lid on spending. A handful of behemoths like Alphabet Inc., Amazon.com Inc., Meta Platforms Inc. and Microsoft Corp. used this formula to seize market share from legacy businesses and power the US stock market to record after record."
"Now you've seen this explosion in capital intensity to the point where it's now the most capital intensive sector in the market. That's just a radical change. Those four companies alone are expected to devote more than $380 billion combined to capital expenditures in their current fiscal years, with most going to chips, servers and other data center-related expenses. That's a more than 1,300% jump from a decade ago."
Big Tech historically combined disruptive innovation, rapid growth and restrained spending to generate outsized profits. Companies such as Alphabet, Amazon, Meta and Microsoft used that model to capture market share and lift US stock performance. The race to develop artificial intelligence has sharply increased capital requirements across the sector. The four firms plan more than $380 billion in capital expenditures this fiscal year, concentrated on chips, servers and data center infrastructure, representing a more than 1,300% rise from a decade ago. Microsoft's capex now equals roughly 25% of its revenue, well above prior levels.
Read at www.mercurynews.com
Unable to calculate read time
Collection
[
|
...
]