US big tech earnings confirmed one thing — AI is not a speculative bubble

Despite growing chatter about an artificial intelligence (AI) bubble, recent earnings from Silicon Valley’s biggest names – Google, Apple, Meta, Microsoft, and Amazon – actually paint a different picture altogether.

These companies aren’t just talking about AI; they’re investing tens of billions of dollars into chips, infrastructure, and data centres to support it.

And unlike speculative manias of the past, this wave is backed by real revenue, enterprise demand, and disciplined execution.

Increasing capital expenditures signal a long-term commitment

Each of the big tech companies reported significant increases in capital expenditures tied directly to their AI ambitions this week. Here’s a quick snapshot of their updates:

These aren’t vanity projects. As Alphabet’s chief executive, Sundar Pichai, put it, “we are investing to meet customer demand and capitalise on the growing opportunities across the company”.

Microsoft chief of finance Amy Hood also echoed that sentiment, noting “demand again exceeded supply” for cloud capacity.

Wall Street is rewarding AI investments

While some big tech stocks dipped post-earnings due to elevated spending forecasts, analysts are increasingly distinguishing between disciplined investment and reckless exuberance.

Google, for example, is currently up more than 6.0% for the week after posting its first-ever $100 billion+ quarter and revealing a $155 billion cloud backlog.

Microsoft’s better-than-expected quarter, with a 39% growth in Azure, made analysts reaffirm their bullish views and raise their price targets on the MSFT stock – with the consensus now pegged at about $631.

The likes of Bank of America raised their price target on Amazon shares as the company framed its $125 billion capex plan as “monetising capacity as fast as we add it” after recording reacceleration in AWS to over 20% in Q3.

Melissa Otto, head of research at S&P Global Visible Alpha, summed it up: “Existing data centres need to be upgraded to handle AI workload … demand is outstripping supply”.

Meta stock: the outlier, not the trend

Meta’s earnings were the exception. Despite beating revenue estimates, its stock plunged nearly 13% after announcing plans to spend up to $72B in 2025 and even more in 2026.

Investors and analysts alike baulked at the “spend now, monetise later” approach, especially given Meta’s track record with metaverse investments in 2021-2022; a period marked by overpromising and underdelivering.

However, that doesn’t mean Meta’s AI ambitions aren’t real.

Its Superintelligence Lab is building foundational models. It’s just that Wall Street wants clearer monetisation timelines.

Infrastructure over demos: why AI isn’t a bubble

Unlike the dot-com era, today’s AI boom is rooted in physical infrastructure and enterprise-grade deployment.

These firms are building data centres, designing chips, and scaling cloud platforms – not just releasing flashy demos.

Gil Luria, equity analyst at DA Davidson, explained: “These companies represent real demand. So if they are buying more chips and building more data centers, that’s healthy”.

Moreover, AI is already embedded in core products:

• Google’s Search and YouTube are increasingly AI-enhanced.
• Microsoft’s Copilot is driving productivity across Office and GitHub.
• Amazon’s AI tools are powering logistics, retail, and AWS.
• Apple is integrating generative features into iOS and macOS.
• Meta is using AI to optimise ad targeting and content delivery.

Verdict: AI is real, revenue-backed, infrastructure-led

Big tech’s Q3 earnings season delivered a clear message: AI is not a bubble.

It’s a capital-intensive transformation led by companies with deep cash reserves, proven business models, and growing customer demand.

While some valuations may run ahead of fundamentals in niche corners of the market, the core infrastructure layer, built by big tech, is here to stay.

Investors are no longer rewarding ambition alone. They’re rewarding execution, monetisation, and strategic clarity.

And for now, the biggest players are delivering – which makes up for the strongest case for owning the US big tech stocks heading into 2026.

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