Major technology stocks delivered a mixed performance on Monday, following a turbulent week that erased more than $1 trillion from the combined market capitalisation of the sector’s biggest names.
Oracle surged sharply, while Microsoft recorded solid gains, and Nvidia and Meta each moved higher, offering tentative signs of stability after recent volatility.
Alphabet edged upward modestly, though Amazon shares slipped, extending investor caution around the company’s heavy spending commitments.
AI Spending Fuels Market Jitters
Investor unease intensified after last week’s earnings reports highlighted rapidly escalating capital expenditure across Big Tech, as companies continue doubling down on artificial intelligence infrastructure.
Amazon, Alphabet, Microsoft and Meta collectively reported around $120 billion in capital expenditure during the fourth quarter alone, a figure that has drawn increased scrutiny.
Projections suggest that combined spending could approach $700 billion by 2026, exceeding the annual economic output of several major nations.
Analysts Highlight Volatility Risks
Jim Reid, head of global macro research at Deutsche Bank, noted that last week marked the worst performance for the so-called “Magnificent Seven” stocks since April’s tariff-driven market shock.
Despite the heavy losses, modest signs of recovery emerged toward the end of the week, with the group posting gains on Friday even as individual stocks remained under pressure.
Justin Post of Bank of America Securities highlighted that rising cloud margins are being accompanied by potential stock volatility, driven by broader macroeconomic headwinds.
However, he added that management teams appear confident demand will remain strong enough to fully utilise expanded capacity by 2026.
Capex Confidence Remains Firm
Market reactions were particularly negative toward Amazon and Alphabet, after both issued capital expenditure guidance that exceeded consensus expectations and overshadowed strong cloud growth results.
Nvidia chief executive Jensen Huang defended the sector’s spending surge, arguing that demand for computing power remains exceptionally high and justifies the investment.
Analysts at Morgan Stanley echoed that view, suggesting hyperscaler capital expenditure could continue rising as cloud usage, data centre commitments and AI workloads expand rapidly.
While volatility persists, confidence in long-term AI-driven growth continues to underpin investment strategies across the technology sector.
