This comment from Meta on its conference call is what has reinvigorated the AI trade
Meta has stepped up spending to build out infrastructure to power artificial intelligence, and that’s reviving the AI trade, which had been showing signs of fatigue. “While the infrastructure planning process remains highly dynamic, we currently expect another year of similarly significant capital expenditures, dollar growth in 2026, as we continue aggressively pursuing opportunities to bring additional capacity online to meet the needs of our artificial intelligence efforts and business operations,” Susan Li, chief financial officer of Meta, said on the company earnings call Wednesday evening. The social media company said capital expenditures will come in between $66 billion and $72 billion , raising the low end of the company’s previous estimate of between $64 billion and $72 billion. Investors cheered the news, pushing up Meta shares by more than 10% Thursday. META 1D mountain Meta Thursday Meta’s peer Microsoft also seized on investment opportunities in AI, expecting more than $30 billion in fiscal first-quarter capital expenditures and assets acquired through finance leases, which would work out to annual growth above 50%. Microsoft stock climbed nearly 4% Thursday, pushing the company’s market cap past $4 trillion . Megacap technology companies tend to rely on their legacy businesses to fund their pursuits of expensive AI infrastructure. Expectations from Wall Street were high for these companies to increase spending on AI infrastructure needs in the current boom. Several chipmaker stocks got a boost from Big Tech’s lucrative spending plans. Nvidia and Advanced Micro Devices gained more than 1% each on Thursday. Broadcom was down 1%, while Micron slipped more than 4%. “We believe AVGO and AMD will be the primary beneficiaries of Microsoft’s and Meta’s increased capex,” Citi said in a note to clients. “We note that Microsoft is roughly 8% of AMD’s sales and Meta is roughly 2% of AVGO’s sales. We view this as positive for AI-exposed stocks such as AVGO, AMD, MU, and NVDA.”
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