Big Tech giants like Microsoft, Alphabet, Amazon, and Meta are set to invest over $650 billion in AI this year. Amazon plans to invest $200 billion, Alphabet between $175-$185 billion, Meta $115-$135 billion, and Microsoft $145 billion in 2026. Most spending will go to AI chips, servers, and data centers.

Investors reacted negatively to the news, as Amazon stock dropped 8%, Alphabet shares fell 3%, and Microsoft stock plummeted over 11%. However, Meta stock rose after revealing how AI boosts its ad revenue. Analysts note a cautious approach to tech stocks amid the spending hikes, with investors scrutinizing returns on AI investments.

The increase in scrutiny on AI stocks could prevent the market from becoming overheated. Investors are recognizing the transformative potential of AI in enterprises, focusing on areas that could be impacted by evolving technology. Companies like Anthropic and Google’s Gemini 3 are gaining traction, shifting attention to potential negative impacts on the software sector.

Read more at Yahoo Finance: Big Tech set to spend $650 billion in 2026 as AI investments soar