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Magnificent 7 stock earnings reveal that big spending plans for AI are still in place.

A row of servers at a data center

Sameer Al-Doumy/Getty Images

less than 3 min read

The core of Big Tech earnings season unfolded last week, and if we learned anything—besides the fact that Mark Zuckerberg hasn’t yet learned how to sound like a human—it’s that the AI trade is alive and well.

Magnificent Seven behemoths are still investing heavily in building out AI infrastructure like data centers with the hope of winning the AI arms race. While investors have voiced skepticism about this monster spending spree, last week proved that big tech has kept calm and spent on.

Just look at Meta, which raised its 2025 capital expenditures forecast from its previous plan to spend $65 billion to a staggering $72 billion. The company had the revenue growth to back up its expensive habits—Meta said it projects Q2 revenue of roughly $44 billion, above analyst expectations.

Microsoft is also heavily splashing out on AI, although its spending slowed slightly. In the first quarter of the year, Microsoft spent $21.4 billion on capex, about $1 billion less than it spent in the category in Q1 of last year. But excluding financial leases, the company’s capex spending was 53% higher than the year prior.

Those aren’t the only Mag 7 names shelling out for robots: Earlier this year, Amazon said it was planning to allocate $100 billion in 2025 on capital expenditures. But Apple, which is far less focused on AI than its peers, expects to spend roughly $10.77 billion on capex in fiscal 2025.

Paying for the AI revolution

The Mag 7 aren’t betting big on the AI transformation just because they like to burn money—AI is transforming how they actually operate. For example, CEO Satya Nadella said last week roughly 30% of Microsoft software code is written by—you guessed it—AI bots instead of humans.

Wall Street, for one, has given these companies’ massive spending plans its vote of approval: Analysts overall have consensus buy or overweight ratings on Amazon, Apple, Meta, and Microsoft. But of these four stocks, only shares of Microsoft and Meta Platforms are positive so far in 2025. The fact that these two companies are also ramping up their AI spending sprees is likely no coincidence, as investors continue to buy into the AI trade.—LB

Making sense of market moves

Stay up to date on the latest market news with daily analysis of the investing landscape, served up Brew-style.

Making sense of market moves

Stay up to date on the latest market news with daily analysis of the investing landscape, served up Brew-style.