Big Tech Spending Spree Is About More Than Capex - Barron'sSkip to Main ContentThis copy is for your personal, non-commercial use only. Distribution and use of this material are governed by our Subscriber Agreement and by copyright law. For non-personal use or to order multiple copies, please contact Dow Jones Reprints at 1-800-843-0008 or visit www.djreprints.com.# Big Tech's Spending Spree Is About Far More Than CapexBy [Adam Levine]ShareResize---ReprintsIn this article[AMZN][MSFT][GOOGL][META] [AAPL]Amaz ...

Core Viewpoint - The US tech sector is facing challenges as UBS has downgraded its outlook from "attractive" to "neutral" [1] Group 1: Market Sentiment - The broader market continues to focus on the transformative potential of AI [1] - UBS expresses concerns regarding significant infrastructure spending required for the tech sector [1] Group 2: Industry Adoption - There is a looming threat related to the adoption of technology within the industry, which may impact future growth [1]

Core Viewpoint - Alphabet, Google's parent company, is entering the bond market with a 100-year bond, raising approximately $32 billion across multiple bond deals in various currencies, with a small portion of £1 billion dedicated to the century bond [1][2]. Group 1: Bond Characteristics - Century bonds are long-term debt instruments, with Alphabet's bond maturing in 2126, appealing to investors like pension funds and insurers who seek steady long-term payments [1][4]. - The bond market operates on the principle that bond prices and yields move inversely; as bond prices increase, yields decrease, and vice versa [8][9]. Group 2: Rationale for Borrowing - Despite having substantial cash reserves, Alphabet is opting to borrow due to the high costs associated with AI infrastructure development, taking advantage of historically low interest rates for flexible funding [5]. - Historical context shows that century bonds are not new, with previous issuances by companies like Coca-Cola and Motorola, indicating a trend in long-term financing strategies [6]. Group 3: Market Implications - Future observations should focus on demand for similar long-term tech bond offerings, pricing dynamics, and the narrative surrounding AI's transition from buildout to revenue generation, which could impact both stock and bond markets [10][11]. - The historical context of tech companies during the dot-com boom suggests that while cash-rich firms may not capture significant upside, they can experience prolonged downturns, a consideration for Alphabet's strategy [12].

Core Viewpoint - Over the past few months, shares of hyperscalers, a select group of Big Tech companies, have transitioned from being market leaders to market laggards [1] Group 1 - The performance of hyperscalers has significantly declined in the market [1]

Core Insights - Jeremy Szafron has joined Kitco News as an anchor and producer, bringing a wealth of experience in journalism, particularly in finance and current affairs [1][5] Background and Experience - Jeremy began his journalism career in 2006 at CTV, where he initially reported on entertainment before transitioning to business reporting, focusing on mining and small-cap companies [2] - He gained recognition for his macro-financial and market trends analysis, becoming a sought-after commentator on CTV Morning Live and a regular on CTV News Network [2] - A significant highlight of his career was covering the 2010 Vancouver Olympic Games, which led to the development of an online video news program for PressReader, a digital newsstand with 8,000 editions in 60 languages [3] Digital Media Ventures - In 2012, Jeremy launched The Green Scene Podcast, which quickly attracted over 400,000 subscribers and positioned him as a prominent voice in the cannabis industry [4] - Following this success, he established Investor Scene and Initiate Research, platforms that provide exclusive market insights and deal-flow opportunities in mining and Canadian small-cap sectors [4] Professional Roles - Jeremy has served as a market strategist and investor relations consultant for various publicly traded companies across mining, energy, consumer packaged goods (CPG), and technology industries [5] - He holds a BA in Journalism from Concordia University, which has supported his diverse career trajectory [5]

Core Viewpoint - The Procter & Gamble Company (PG) is considered to have iconic brands, but the current trading levels do not present much value for investment, as it is trading around fair value [1] Group 1: Company Overview - Procter & Gamble holds some of the most iconic brands globally [1] - The company is currently trading around its fair value, indicating limited investment appeal at present levels [1] Group 2: Analyst Background - The analyst has over a decade of experience in researching various industries, including commodities and technology [1] - The analyst has transitioned from writing a blog to a value investing-focused YouTube channel, researching hundreds of companies [1] - The analyst expresses a preference for covering metals and mining stocks but is also comfortable with consumer discretionary/staples, REITs, and utilities [1]

Core Viewpoint - The S&P 500 index experienced fluctuations shortly after market opening, influenced by major tech stocks like Alphabet and Amazon, which contributed to a decline in the index despite a majority of stocks rising [1]. Group 1: Market Performance - The S&P 500 was moving in and out of negative territory after opening higher [1]. - The Nasdaq Composite dipped by 0.2% [1]. - The Dow Jones Industrial Average increased by 334 points, or 0.6% [1]. Group 2: Impact of Tech Stocks - Alphabet and Amazon.com were leading large tech stocks lower, impacting overall market performance [1]. - The iShares Semiconductor ETF also saw a decline of 0.8% [1].

Investors began February with something of a shock, when artificial intelligence (AI) made clear that it’s not just changing industries and technology — it’s shaking markets to their foundations. Here’s what you need to know before selling. What Happened? Major American stock indexes suffered through nearly a week of losses in early February as anxiety over AI spending (and how its reduced need for coders could impact the revenues of multiple tech companies) shock waved throughout Wall Street, with stock ...

Core Viewpoint - Alphabet Inc. is preparing to issue a rare 100-year bond, aiming to raise approximately $20 billion to support its significant investments in artificial intelligence and other technologies, marking a notable shift in how tech companies are perceived in the financial market [1][2] Group 1: Century Bonds Overview - Century bonds are unique financial instruments typically issued by companies with exceptional longevity and financial resilience, often associated with blue-chip industrial firms rather than technology companies [1] - If Alphabet proceeds with this bond issuance, it will join a select group of corporations that have issued 100-year debt, including Ford Motor Co. and Motorola [1] - The rarity of century bonds makes them attractive to life insurance companies and pension funds, which seek long-term assets to match their obligations [1][2] Group 2: Investor Demand and Market Perception - Analysts expect strong demand for Alphabet's 100-year bond, with reports indicating over $100 billion in demand across various currencies and maturities, reflecting a sustained appetite for high-grade corporate debt [1][2] - The willingness of investors to commit capital to a technology company for a century indicates a shift in perception, viewing hyperscale tech firms as critical infrastructure rather than cyclical entities [2] - The strategic choice to issue the bond in sterling is seen as beneficial, as the UK market has a deep pool of investors familiar with ultra-long maturities [2] Group 3: Alphabet's Funding Strategy - The century bond issuance is part of a broader multi-tranche offering, including a seven-part dollar transaction and potential issuance in Swiss francs, showcasing a diversified funding approach [2] - Alphabet's previous bond issuance in November raised $17.5 billion, attracting approximately $90 billion in orders, indicating strong market interest [2]

A lot of market watchers are excited by the "January Barometer" or "January Indicator," which suggests that January's returns indicate the direction of stocks for the full year. The S&P 500 index was certainly up in January (although by just 1.37%). But tech investors might not want to pop the champagne just yet, because there's another historical trend we've seen in January that has dire implications for tech stocks in 2026. It may already be starting to play out. Where to invest $1,000 right now? Our an ...