IO Fund analyst Beth Kindig noted that big tech is spending hundreds of billions on AI infrastructure, calling for visible ROI metrics to justify ongoing capex.
Big Tech earnings next week could offer Wall Street its clearest look yet at whether hundreds of billions of dollars in AI infrastructure spending are starting to pay off, according to I/O Fund's Lead Tech Analyst Beth Kindig. Investors want proof that AI monetization is finally catching up with years of heavy AI investment. "Big Tech has spent considerable capex for AI infrastructure, and the Street will want to see this spend turning into revenue and profits," Kindig said.
One of the biggest surprises of 2026's AI rally is that shares of the companies driving the AI buildout have largely lagged those of companies supplying the underlying infrastructure. Alphabet Inc. (GOOG, GOOGL) has led the group with an 11% gain this year, followed by Amazon.com Inc. (AMZN) at 8%. Shares of Meta Platforms Inc. (META) are down 2%, while Microsoft Corp. (MSFT) shares have declined 18%. "What is most shocking is how much Big Tech has lagged in dollar terms," Kindig noted.
Investors will look beyond revenue and earnings per share to cloud growth, AI software adoption and advertising trends as evidence that AI investments are paying off. At Alphabet, the focus is on whether Google Cloud can sustain its momentum while Search continues to monetize AI through advertising and growing inference demand. Microsoft faces pressure to reignite Azure growth despite its rapidly expanding AI business, while investors will also be watching for updates on its Maia AI chips. At Meta and Amazon, investors will be watching whether AI investments continue driving advertising growth at Meta and cloud growth at AWS.
Strong AI-driven growth across cloud, software and advertising could broaden the AI rally beyond chipmakers and infrastructure suppliers by demonstrating that years of heavy investment are beginning to generate sustainable returns. JPMorgan's Global Market Strategist Hugh Gimber noted that the recent sell-off in chip stocks is not a reflection of weakening fundamentals, as semiconductor companies continue to deliver strong results. "For me, I think what's key here is not so much what the semis names are telling you themselves, but rather what we're going to get from the hyperscalers over the next couple of weeks, because all of that earnings growth is because of hyperscaler capex," he said.
Alphabet, Microsoft, Meta, Amazon, Apple, Intel and other major technology companies are set to report quarterly earnings over the next two weeks. At the time of writing, the tech-heavy Nasdaq Composite index was down nearly 1%. The Invesco QQQ Trust (QQQ) is up 25% over the past 12 months, while the iShares U.S. Technology ETF (IYW) is up 35%.