Tech leaders boost AI spending, but Alphabet's cash flow wins investor favor

Core Insights - Four major U.S. technology companies, Alphabet, Microsoft, Meta, and Amazon, announced plans to increase capital expenditures over the next year, focusing on investments in chips and data centers [1][2] - Investors reacted positively to Alphabet's plans, viewing its ability to fund investments through cash flow favorably, while showing concern for Microsoft and Meta's higher capital spending relative to their revenues [2][4] Company-Specific Summaries - Alphabet: Reported a capital expenditure of $23.95 billion in the September quarter, which constituted 49% of its cash generated from operations. This strong cash flow allowed Alphabet to balance its expenses effectively, leading to a stock price increase of about 3% [4][6][7] - Microsoft: Experienced a decline in stock price by 3% as investors expressed concerns over the high percentage of capital expenditure at 77.5% of cash flow, raising questions about the timeline for returns on investments [4][6] - Meta: Saw its shares drop more than 11% due to worries about the high capital expenditure ratio of 64.6% compared to its cash flow, indicating investor skepticism regarding the returns on its heavy investments [4][6] - Amazon: Stock surged nearly 13% after reporting a 20% rise in revenue from its cloud unit, AWS, which alleviated concerns about over-investing in AI and demonstrated that its investments were yielding positive results [3][4][6]