NEW YORK, Jan 27, 2026, 13:53 EST — Trading in regular session.
Shares tied to AI climbed Tuesday, led by Nvidia, which gained 1.7%, and Microsoft, up 2.3%, as chip stocks outpaced the broader market. The Nasdaq-100 ETF Invesco QQQ edged up roughly 0.9%, the iShares Semiconductor ETF jumped 2.8%, while the S&P 500 ETF SPY rose 0.4%.
The next challenge arrives quickly. Investors have banked on Big Tech’s ability to pour money into artificial intelligence without hurting margins, but costs are rising. 1
Capital spending — or “capex,” the funds companies pour into buildings, servers, and data centers — jumped over $45 billion in 2025, reaching $383 billion for Meta, Alphabet, Amazon, Apple, and Microsoft, according to S&P Global Market Intelligence. Analysts expect these tech giants to boost capex by more than $100 billion in 2026, pushing total investments close to $500 billion. 1
Microsoft and Meta are set to announce earnings on Wednesday, with investors watching closely to see if the AI investments are translating into growth. This earnings season also highlights the question of whether the industry can boost AI spending by roughly 30% this year, pushing it past $500 billion without rattling shareholders. 2
On Monday, Microsoft introduced the second generation of its custom AI chip, Maia 200, alongside new software tools designed to challenge Nvidia’s dominance—a gap often noted on Wall Street. The company said Maia 200 will start operating this week at a data center in Iowa, with another set to launch soon in Arizona. 3
Nvidia has been expanding its reach beyond just data centers. The company launched open-source AI models for weather and climate forecasting as part of its Earth-2 initiative. General manager Mike Pritchard claimed these AI models can produce forecasts “1,000 times faster” while using less energy than conventional techniques. 4
Another concern is the self-reinforcing nature of the arms race. Bridgewater’s co-CIOs cautioned that “game-theoretic” forces may compel companies to keep pouring money into AI, since lagging behind isn’t an option—even when short-term returns are unclear. 5
The AI trade still stumbles on simple questions: who profits, and when? Over half of the 4,454 CEOs surveyed by PwC reported no revenue or cost gains from their AI investments. At Davos, Microsoft CEO Satya Nadella noted that steering clear of a bubble “by definition” demands that benefits be more evenly distributed. 6
Meta’s earnings report is shaping up as a key volatility trigger. Options markets are pricing in about a 6% move, up or down, once the numbers drop. Investors are zeroed in on any guidance around 2026 spending and capital expenditures. 7
Microsoft hits a “prove it” moment as investors zero in on whether Azure’s cloud growth can keep pace while the company ramps up spending on data centers. Wedbush analyst Dan Ives dubbed this week a critical test for CEO Nadella and his leadership team, GeekWire reported. 8
Hot money showed little mercy. Palantir dipped roughly 0.6% while C3.ai dropped around 3.0%, lagging behind the mega-cap giants driving most of the AI buzz.
Investors beyond the U.S. are keeping an eye on the supply chain as well. ASML is set to report earnings on Wednesday. Analysts highlight the significance of its outlook since the Dutch company’s cutting-edge lithography machines are crucial bottlenecks in producing advanced AI chips. 9
The calendar is packed with key reports: Microsoft and Meta are both set to release earnings after the market closes on Wednesday, Jan. 28. ASML will report that day as well, but in Europe. Alphabet’s earnings drop on Feb. 4, followed by Amazon on Feb. 5. 10
