Episode summary
Big Tech to Spend $650 Billion This Year as AI Race Intensifies | Bloomberg Intelligence
Bloomberg Intelligence
· · 23 min · Hosts: Paul Sweeney, Scarlet Fu, John Tucker · Guests: Mandeep Singh, Poonam Goyal, Ken Shea, Katherine Doherty
Summary
Big Tech spending on AI infrastructure dominated the conversation, with a guest saying four of the biggest U.S. technology companies now point to about $650 billion of capital expenditures in 2026. He argued the latest Amazon number, $200 billion, helps explain why the market is uneasy: the stock fell after investors saw a very large upfront spend with uncertain return on invested capital. He said capex growth still appears to be peaking, but demand for AI infrastructure remains strong and supply constraints are still limiting growth.
The discussion also turned to company-specific earnings reactions. Under Armour’s stock jumped after a better-than-feared quarter and raised guidance, but a guest said the turnaround remains incomplete because North America sales are still falling and the loss of Steph Curry is a material headwind. Amazon’s retail business, by contrast, was described as strong, with share gains, double-digit online growth and new AI shopping tools like Rufus.
Philip Morris was presented as a steadier winner: a guest highlighted fourth-quarter sales and EPS growth, upbeat 2028 guidance, and rising transparency around the smokefree business, which already accounts for more than 40% of sales. On Wall Street, another guest said 2025’s strong trading and deal activity should lift bonus pools at JPMorgan, Goldman Sachs and Bank of America by at least 10%, with top performers seeing much more.
Key takeaways
- A guest said hyperscaler capex is approaching a peak growth phase, but 2026 spending could still rise almost 60% year over year.
- Amazon’s $200 billion capex plan was cited as a key reason the market sold off the stock despite improving AWS growth.
- Under Armour’s rebound looks fragile, with North America sales still down and the loss of Steph Curry estimated at more than a $100 million franchise.
- Philip Morris is benefiting from smoke-free products that already make up around 42% of sales, with stronger disclosure likely to help investor confidence.
- A Bloomberg News reporter said JPMorgan, Goldman Sachs and Bank of America are likely to raise bonus pools at least 10% after a strong 2025.
Notable quotes
“It's just that $200 billion number and the fact that their margins are going down on the AWS side”
“It's already around 42% of their sales”
How the episode opens
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Eastern on Apple CarPlay and Android Auto with the Bloomberg Business App. Listen on demand wherever you get your podcasts or watch us live on YouTube. We got another data point last night in terms of how the market views this tech capex.
Amazon, they have to take the cake. $200 billion in capex. That's well above what the consensus was.
Guess what? The stock is trading down today. So, let's get a sense of kind of where this tech spending theme is for this sector.
Uh, Mandep Singh, uh, he joins us here. He runs all the tech research for Bloomberg Intelligence. for those mandep that were looking for another data point to say how does the market view tech spending did we did we get it last night with Amazon and now the stock trading off today.
Yeah, I mean this was uh as big as it can get in terms of you know a capex number uh out of the hyperscalers and probably because they went last in terms of you know reporting earnings. But look uh I think had they not gone that big uh the stock would have been up because they posted best AWS growth in the last 3 years and uh you know uh sequentially things seem to be improving. It's just that $200 billion number and the fact that their margins are going down on the AWS side.
That's why you see this kind of stock reaction and there wasn't enough justification to you know ramp up capex by about 55% uh to 200 billion.
Mandep how long are we going to see these massive increases in capex? I mean this was for 2026 full year.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- big tech capex
- ai data center spending
- amazon earnings and data center plans
- consumer products earnings
- bank bonuses
Companies and tickers mentioned
- AMZN
- UAA
- UA
- PM
- JPM
- GS
- BAC
- Amazon.com Inc.
- Under Armour
- Philip Morris International
- JPMorgan Chase
- Goldman Sachs Group
- Bank of America
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Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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