Big Tech companies have seen over $1 trillion wiped from their market cap over the past week, as fears over AI spending sparked a sell-off.
Microsoft , Nvidia , Oracle , Meta , Amazon and Alphabet all saw their shares fall in the week up to market close on Thursday, as the companies' earnings reports signaled huge continued capex spending from hyperscalers.
Amazon was down 7% in premarket trading on Friday. Alphabet was 0.7% lower, Meta was largely unchanged, while Oracle, Nvidia and Microsoft were up in the low single-digit percentages.
Plans to funnel $660 billion into AI this year were announced by Big Tech stocks, the Financial Times reported, a figure higher than the GDP of countries like the United Arab Emirates, Singapore and Israel.
Shares of companies developing hardware for the AI buildout will likely encounter continued volatility as "sentiment contagion takes hold," Paul Markham, investment director at GAM Investments, told CNBC.
"Questions over the extent of capex as a result of LLM build-outs, the eventual return on that, and the fear of eventual over-expansion of capacity will be persistent," he added.