Big tech stocks were mixed on Monday, following a bruising week that witnessed more than $1 trillion wiped from their market caps. Oracle rose by 9 percent and Microsoft by 3 percent. Nvidia and Meta each added more than 2 percent.
Alphabet reached a marginally higher level, while Amazon shares dropped slightly. D.A. Davidson provided a boost to Oracle with the upgrade of the stock. The market became rattled when spending forecasts continued to skyrocket in Big Tech’s performance last week, with companies increasing their bets on AI.
Amazon, Alphabet, Microsoft, and Meta announced capital expenditures amounting to approximately $120 billion in the fourth quarter. The number may be close to 700 billion in 2026, above the gross domestic product of nations such as the United Arab Emirates, Singapore, and Israel.
Jim Reid, Head of Global Macro Research at Deutsche Bank, wrote in a Monday note that last week was the worst in the history of the so-called “Magnificent 7” stocks since April, when U.S. tariffs sent markets into crisis, and the stocks declined 4.66 percent.
Reid reported that there were indications that the markets had improved by the time they closed last week, with the Magnificent 7 stocks increasing by 0.45 percent on Friday even as Amazon dropped by 5.55 percent.
Justin Post, a Research Analyst at Bank of America Securities, wrote in a note on Monday that rising margins of cloud companies are coupled with the so-called “potential stock volatility” amid macro headwinds.
He stated, “But management teams seem confident in their ability to forecast demand, and that capacity will be fully utilized in 2026.”
The markets responded negatively to Amazon and Alphabet’s capex guidance being “well above” consensus expectations, added David Lefkowitz, CIO head of US equities at UBS Financial Services on Friday, adding this “overshadowed stronger-than-expected cloud growth for both companies.”
Nvidia CEO Jensen Huang informed CNBC’s “Halftime Report” on Friday that the tech industry’s increasing capital expenditures for AI infrastructure were justified, given the “sky-high” demand for computing power. Analysts estimate that hyperscaler capex will expand.
Morgan Stanley said in a note on Monday morning, “As monthly tokens processed grows exponentially, aggregate cloud revenue for GCP/AWS/Azure accelerates, data center commitments expand, and data center component suppliers highlight accelerating demand, we believe there will continue to be upward pressure on hyperscaler capex estimates.”
