3 of 4 Mag 7 Tech Giants Slumped on CapEx Concerns Despite Beating Earnings

Mega-cap tech earnings produced split market reactions that left the broader S&P 500 steady but highlighted growing investor anxiety over rising AI-related capital expenditures. Alphabet beat expectations and signaled a roadmap with up to $185 billion in AI capex and a 63% surge in Google Cloud revenue, sending its shares higher. Meta also beat estimates but raised FY2026 CapEx to $125B–$145B (from $115B–$135B), triggering a sharp sell-off (shares slid about 10%). Amazon and Microsoft posted strong cloud growth but disclosed heavy spending—Amazon’s Q1 CapEx was $44.2B (up 77% YoY) and free cash flow plunged—pressuring their stocks. Schwab’s Nathan Peterson framed the divergence as stock-specific responses in a calm tape, noting that elevated CapEx expectations have reset investors’ bar for positive guidance. Overall market impact: earnings beats no longer offset investor focus on ramping AI-capex and cash-flow pressure, producing mixed stock-level outcomes within a broadly calm index environment.