Microsoft and Meta are about to have a very uncomfortable conversation with Wall Street. Both companies report earnings this week, and the spotlight isn’t on revenue growth or user metrics. It’s on how much money they’re lighting on fire building AI infrastructure, and whether any of it will generate returns before investors lose their collective patience.
The numbers are genuinely staggering. Combined capital expenditure across Microsoft, Meta, Alphabet, and Amazon is expected to hit roughly $700 billion in 2026, with projections for 2027 exceeding $1 trillion.
The Alphabet warning shot
Investors already showed their hand when Alphabet reported record profits for Q2 2026. The reward for hitting all-time earnings? A stock decline of more than 7% after the company raised its capex forecast by $15 billion.
Now it’s Microsoft and Meta’s turn to walk that same tightrope. Meta’s capex outlook has ballooned from an initial range of $115 to $135 billion to an updated range of $125 to $145 billion. Microsoft’s target sits between $80 and $120 billion. Both figures represent a fundamental transformation from asset-light software businesses into something that looks a lot more like industrial companies.
