Are investors really getting cold feet about the AI boom?
Financial Times · 2026-07-30
Despite the stock market's AI euphoria, there are growing anxieties among investors about the sustainability of the data centre infrastructure boom. While immediate spending remains robust, some speculate that Wall Street foresees a nearing peak in capital expenditure, even though tech companies' rhetoric and figures, like Microsoft CFO Amy Hood's description of current capacity shortage as a "relatively extreme moment," don't support this. Cyclicality is inevitable, and though memory chip shortages are projected until late 2027, new capacity in 2028 might shift the landscape.
Investor unease also stems from potential concentration risk, with Microsoft and Google’s combined backlog soaring to $1.2tn from under $500bn a year ago, heavily reliant on OpenAI and Anthropic, whose long-term demand is unproven. Furthermore, the sheer scale of capital spending relative to industry finances is a concern. Meta's positive free cash flow tumbled, and while Microsoft still projects positive cash flow for its next fiscal year, this pales compared to the $110bn spare cash generated by these companies in their last fiscal years. Alphabet, for instance, has seen its long-term debt balloon to nearly $100bn from $11bn a year ago, and recently raised $85bn in fresh equity, signaling a structural shift from a profitable search engine giant investing in AI to an AI company with a vastly different financial and potential business model. Individually, these factors might not be decisive, but collectively, they highlight rising anxiety.
*The full article also explores the specific financial implications of these shifts for major tech companies and the broader market.*