When the AI Bill Catches Up with the Stock Market

Meta, Alphabet, Oracle, Amazon and Microsoft have committed to spending $800.6 billion in 2026. For a long time, the scale of these budgets was a promise of growth. The latest quarterly results have reversed that reading: spending is now under the microscope.

Hundreds of Billions Wiped Out in Two Sessions

Alphabet lost more than $500 billion in market value in a single session, after acknowledging that its AI-generated summaries were weighing on its search advertising revenue. The group nonetheless plans up to $205 billion in investments this year, almost all of it AI-related. The next day, Intel shed as much as 30%, or more than $130 billion in market capitalization. Its chief financial officer warned that the group would not generate more cash than it spends this year, and he anticipates a slowdown in the PC market at least through the first half of next year.

Amazon, which has committed to $220 billion in spending, saw its stock fall as much as 6% after stating that its spending had increased sixfold in three months. Reddit lost 26% and Roblox nearly 20%. The Nasdaq dropped 3.5%.

Credit as the Adjustment Variable

The mechanism is simple. Colossal investments consume cash, disappointing results punish share prices, and raising equity capital becomes less attractive. Alphabet thus reopened the euro bond market: seven tranches of 2 to 19 years, less than a week after its results. The cost of protection against default on its debt had just hit a record. According to one analyst, the group is seeking to shift its financing toward debt, encouraged by the success of a Microsoft issuance the previous week. A strategy that now runs through a more demanding credit market.

What Nuances the Picture

The decline must be put in context. The Nasdaq is still up 7.6% over twelve months, and Amazon about 7%. One strategist notes that November is usually a good month for equities, and that prolonged weakness would be needed to conclude that AI has peaked. Edward Yardeni even believes the slowdown in this theme is healthy for both stocks and bonds, and he maintains his year-end target for the S&P 500. Apple, with more measured AI spending, has reclaimed the world's top spot with $5.03 trillion in market capitalization. That contrast, however, establishes no causal link.

The file contains no measure of revenue actually derived from AI, nor reliable market data: the index variations provided are inconsistent and were not retained.

A Demand for Proof, Not a Verdict

It is reasonable to conclude that investors have changed their attitude. They now want to see AI profitability before financing its next stage. The question remains whether debt markets will sustainably absorb this demand for capital. Nothing, at this stage, supports talk of a bursting bubble.

This article was written with the assistance of artificial intelligence and verified by our editorial team.