AI spending spooks investors in Big Tech earnings

The latest earnings reports from major US tech companies have eroded market euphoria over artificial intelligence, as investors worry about massive infrastructure spending. Amazon and Alphabet particularly rattled markets with their capital expenditure forecasts, which many consider excessive. Amazon reported revenue near $202 billion, slightly below estimates, while Alphabet's $127.6 billion fell short of the $128.2 billion expected. Alphabet suffered its worst trading day ever, dropping nearly 13% and erasing $500 billion in market value. Intel plunged over 28%. Investors now focus on cash generation, with Alphabet reporting negative free cash flow of $9.1 billion and Amazon burning over $42 billion in the past year. Analysts note a shift in investor demands from growth to profitability, comparing the situation to the dot-com bubble. Anthropic's upcoming IPO, targeting up to $2 trillion valuation, will test market sentiment, though the company holds $112 billion in cash reserves.