The New Rules For Big Tech's AI Spending

What happened: Alphabet (GOOGL) shares fell 10% after a rare earnings miss, while Oracle (ORCL) rebounded 10% following Analyst Day guidance and Microsoft (MSFT) unveiled a large voluntary buyout program. Key numbers: Alphabet capex $51.4B; free cash flow deficit $9.1B versus $24.5B surplus a year earlier; Oracle lost half its market value over five months; Meta (META) $95B stock sale. Why it matters: Investors are demanding realistic paths to monetization and strong free cash flow, and companies that spend too little or too much on AI are set to be punished.

Alphabet (GOOGL) shares fell 10% after a rare earnings miss, while Oracle (ORCL) rebounded 10% following Analyst Day guidance and Microsoft (MSFT) unveiled a large voluntary buyout program.

Investors are demanding realistic paths to monetization and strong free cash flow, and companies that spend too little or too much on AI are set to be punished.