Yahoo Finance·2025-10-30 22:22Core Insights - Major tech firms like Meta and Microsoft are significantly increasing their AI-related capital expenditures, which has led to a decline in their stock prices, indicating investor concern over these spending plans [1][2][3] Company Summaries - Meta: Plans to spend $70 billion to $72 billion on AI capex in 2025, an increase from previous guidance of $66 billion to $72 billion. The company anticipates even higher spending in 2026, primarily due to infrastructure costs. Following this announcement, Meta's shares dropped as much as 14% [2][8] - Microsoft: Reported a record $34.9 billion in capex for the past quarter, up from $24.2 billion in the previous quarter. The company also indicated that spending could increase in 2026, resulting in a 3% drop in its stock price at intraday lows [3][8] Industry Trends - The overall confidence in AI investments is waning, with growing concerns about a potential stock market bubble as investors reflect on the substantial gains in recent years. There is skepticism regarding the monetization of AI despite significant investments in infrastructure [4][5] - Analysts express worries that the current AI spending trends may mirror past market fads that ultimately failed. For instance, Meta's previous heavy investments in the metaverse led to substantial losses when market interest waned [6][7] - Peter Berezin, chief market strategist at BCA Research, highlighted the recent stock declines of Meta and Microsoft as a "yellow flag" for the AI sector, suggesting that further announcements of increased capex from major tech firms could signal a deflation of AI hype [7][8]