Big Tech faces investor scrutiny over AI spending as earnings reports approach

Google, Microsoft, and Amazon face investor pressure this week to justify massive AI spending as they report quarterly earnings, with questions over costs, profits, and future returns. Their results represent over one-third of S&P 500 earnings. Investors are focused on how much these companies spend on AI and what income they can expect from it, following similar scrutiny of Meta's results. Bank of America strategist Savita Subramanian noted estimates for 2027 cloud computing capital spending have risen nearly 90% since early 2026. The pressure stems from changing economic conditions, a recent tech stock sell-off, and concerns about funding AI expansion through borrowing or share sales. Businesses are also cutting AI spending by choosing cheaper models, while upcoming listings by Anthropic and OpenAI add further market uncertainty.