Major tech companies are intensifying investments in artificial intelligence (AI) amid growing competitive pressures, impacting their financial performances. This week, four of the “Magnificent Seven” stocks—Microsoft, Meta Platforms, Tesla, and Apple—reported earnings that reflected the high costs associated with maintaining their market dominance and the expected future expenditures on AI infrastructure.
Microsoft reported second-quarter earnings for 2026 of $81.3 billion in revenue, a 17% increase year-over-year, with earnings per share of $5.16, despite a notable 66% rise in capital expenditures driven primarily by AI initiatives. Meta reported earnings of $8.88 per share on $59.9 billion in revenue, forecasting a total AI-related investment between $115 billion and $135 billion by 2026. Tesla’s earnings came in at $0.50 per share with revenues of $24.9 billion, also announcing plans to invest $2 billion in AI initiatives. Apple reported fourth-quarter earnings of $2.84 per share and revenue of $143.8 billion, breaking an all-time record with iPhone sales, but investors remained cautious due to its slow approach to AI.
Collectively, Big Tech is projected to invest over $400 billion in AI infrastructure through 2026, with some estimates reaching as high as $530 billion. This significant investment trend indicates a shift not only within these companies but also highlights broader market opportunities in AI-related sectors.
