Big Tech Faces Depreciation Shock from Massive AI Spending
Yahoo Finance ·
Alphabet and Meta both burned cash in the third quarter as AI capital expenditures exceeded operating cash flow, contributing to Big Tech losing nearly $900 billion in market value last week. Depreciation stemming from this year's roughly $500 billion in spending will begin to weigh on operating margins and earnings in 2027. Meta is already feeling the pressure, with third-quarter depreciation rising 44%. While cloud growth offers a buffer for Microsoft and Alphabet, Meta remains the most exposed. Alphabet shares fell 13% on Thursday after reporting a negative free cash flow of $9.1 billion for the third quarter. Meta spent $34.9 billion on capex against $32.8 billion of operating cash flow, and Microsoft saw its free cash flow slip to $18.6 billion. Scale Venture Partners' Rory O'Driscoll warned that while 2026 remains a golden period for semiconductor sellers, 2027 will introduce heavy depreciation hits for major tech firms as these massive investments migrate to their income statements over the coming years.
AI 시장 분석
Big tech companies like Alphabet and Meta recorded cash burn in the third quarter due to a surge in AI-related capital expenditures (Capex), erasing about $900 billion in market capitalization within a week. Starting in 2027, when depreciation costs from large-scale facility investments are fully reflected, it is expected to act as a direct downward pressure on operating profit margins and net income. While Microsoft and Alphabet, which have cloud businesses, have some defensive capability, Meta, which is highly dependent on advertising, is expected to take a relatively heavy hit.
상승 영향
- Semiconductors — Big tech companies' AI facility investments this year reach about $500 billion, allowing semiconductor sales companies to fully enjoy earnings benefits.
- Cloud Computing — Microsoft's Azure and Google Cloud are recording high growth, acting as a buffer to offset massive AI investment costs and depreciation pressure.
하락 영향
- Big Tech — AI-related capital expenditures exceed operating cash flow, consuming cash, and operating profit margins are feared to be hit by the full reflection of depreciation expenses after 2027.
- Social Media — Ad-based platforms like Meta lack rental revenue models like cloud, forcing them to absorb AI facility investment costs and depreciation burdens solely through ad revenue.
DYAX 전담 분석
This year's big tech AI facility investments, reaching about $500 billion, are immediately driving the earnings of chip makers, but they form a causal relationship that will lead to massive depreciation after 2027, directly hitting big tech's core profitability. In fact, Meta's third-quarter depreciation expenses surged by 44%, lowering the operating profit margin excluding legal costs by 5 percentage points, reflecting these concerns in advance.
The bullish scenario is that high growth in the cloud segment offsets the depreciation burden and drives a stock price rebound, while the bearish scenario is that valuation plummets due to additional margin erosion from soaring costs combined with delayed AI monetization. Investors must closely monitor each company's cloud revenue growth rate and the upward trend in depreciation expenses.
AI가 생성한 분석으로 투자 자문이 아닙니다.
DYAX Investor Sentiment
Bullish (Long) 51% · Bearish (Short) 49%
516 participants
Related News
- Tesla's China-Made Vehicle Sales Rise 10.3% in October
- Samsung Secures AMD and Nvidia Contracts for Texas Facility
- Beyond Valuation: What Investors Should Really Focus On Regarding Anthropic
- Talen Energy Corporation Q3 2026 Earnings Call Summary
- Alibaba Shares Dip Ahead of Qwen AI iPhone Testing Phase
- Apple Valuation Height Sparks Debate Over AI Market Durability
