For the better part of two years, Wall Street skeptics have asked the same question about Big Tech’s AI spending spree: where are the profits? HSBC’s latest investment outlook suggests the answer is finally arriving, and investors are paying attention.
The bank’s private wealth division has made “Invest in the AI-led future” a cornerstone of its Q3 2026 strategy, noting that hyperscalers, the massive cloud and AI operators like Amazon Web Services and Microsoft Azure, are demonstrating they can generate resilient revenue growth and maintain margin stability even while pouring billions into infrastructure.
The profit question gets an answer
HSBC’s strategists have taken notice. The bank named generative AI a leading technology investment area following Q4 2025 earnings commentary, effectively upgrading its conviction level on the theme after seeing the numbers come through.
The shift in how these companies fund their AI buildout tells its own story. In 2025 and 2026, hyperscalers have increasingly turned to corporate bond markets to finance AI capital expenditures, moving away from their previous reliance on free cash flow.
