The most urgent questions for tech investors are: Who is going to make a windfall from the AI frenzy, and at what cost?
There’s a lot riding on the answer that Microsoft and Meta will give later today, given the billions being spent by both companies. AI will all be worth it if they can show their investment is pay off, like Alphabet did.
But there are also pitfalls. AMD was a disappointment and investors wiped $122 billion off Samsung’s market value on the view it’s an AI laggard.
Investors have turned cautious toward megacap tech stocks, given the enormous AI investment, pricey valuations and slowing earnings growth. A gauge of the Magnificent Seven stocks tracked by Bloomberg has struggled to regain its July highs.