NEW YORK, April 30, 2026, 10:01 EDT
On Thursday, U.S. investors grew choosier with artificial intelligence stocks. Meta Platforms dropped close to 10%, Microsoft slid over 3%, while Alphabet picked up nearly 6% as earnings moved the focus from the hype around AI to the hefty price tags involved. Nvidia, the trade’s chipmaker of choice, also traded lower early on.
This week’s earnings could be the sharpest reality check yet for Wall Street’s appetite to bankroll the AI boom, whatever the cost. Capital expenditure — or capex — money funneled into things like chips, servers, and sprawling data centers, has pushed its way from a footnote to the headline. Right now, that’s the whole story.
AI spending at Meta isn’t letting up, and more of it is being financed with debt. The company bumped its 2026 capital expenditure target to a range of $125 billion to $145 billion, from its earlier $115 billion to $135 billion outlook. Reuters said Meta is eyeing $20 billion to $25 billion in investment-grade bonds as it ramps up AI infrastructure. S&P Global left Meta’s rating unchanged, but flagged that the AI buildout is beginning to weigh on credit metrics.
Microsoft handed investors much the same invoice, but cloud came in stronger. Projected capital spending for 2026 landed at $190 billion, topping what analysts had penciled in. Azure’s revenue climbed 40% over the latest quarter—still trailing Google Cloud’s 63% jump. “Return on these investments” is still a point of confidence, CFO Amy Hood insisted. The market, though, wasn’t simply buying that story. Reuters
Here’s another red flag: solid earnings just aren’t cutting it. Alphabet got a bump after Google Cloud posted its strongest growth on record, but over at Amazon, AWS notched a 28% jump in sales to $37.6 billion, thanks partly to AI demand from big business. Meta? Revenue topped forecasts, yet markets focused on rising capex instead.
Meta’s numbers “failed to impress investors,” D.A. Davidson managing director Gil Luria pointed out, especially with Google posting a stronger quarter. From Madison Investments, large-cap portfolio manager Joe Maginot put it simply: the market wants to know, “what’s the return” on Meta’s capex? Reuters
Third up: positioning. Options markets had been pointing to one-day moves of anywhere from 4% to 7.1% for Amazon, Microsoft, Alphabet and Meta as earnings approached. Traders riding the AI theme saw Bespoke Investment Group’s 50-stock basket jump 27.2% between March 30 and Monday. The Philadelphia semiconductor index? Up roughly 40% this year, and it’s more than doubled in the past twelve months.
On Tuesday, that positioning flipped in a hurry. The Nasdaq dropped 0.90%, while the S&P 500 slid 0.49%. AI-related jitters put pressure on chipmakers; Nvidia, AMD, and Broadcom all closed lower, falling anywhere from 1.6% to 4.4%. “Take a few chips off the table,” said Chuck Carlson, chief executive at Horizon Investment Services, pointing to the earnings slate as a motivator for investors. Reuters
Valuation risk is lurking just beneath the surface. According to Goldman Sachs, “terminal value”—that’s the portion tied to projected earnings beyond the next decade—now makes up roughly 75% of the S&P 500’s total equity value, a level not seen in 25 years. The bank figures a single percentage point reduction in expected long-term growth could wipe about 15% off the S&P 500’s enterprise value, with high-growth stocks taking the brunt. Reuters
AI bulls aren’t getting much help from the macro backdrop. U.S. inflation picked up speed in March, Reuters noted, with the Iran war sending gasoline prices higher and fueling bets that the Federal Reserve might leave rates untouched deep into next year. That’s a headwind for growth stocks, since their valuations lean heavily on future profits.
There’s a clear risk in the cautious take: demand hasn’t disappeared. Alphabet now credits enterprise AI as the primary growth engine for Google Cloud—a first. Amazon just turned in its fastest AWS growth rate in 15 quarters. Over in China, Reuters notes, demand is so hot that Nvidia’s B300 server prices have surged to nearly $1 million apiece. That hardly fits a cycle in retreat.
The AI stock rally isn’t done, but the game’s gotten tougher. Investors this week stuck with the AI theme, yet they’re getting more selective—favoring companies that can show real revenue now over those still pitching a longer runway and another round of market patience.
