Metatank rises 10%, Alphabet rises 5% as companies increase capital investment

alphabet‘s stock rose more than 5% on Thursday. Meta Shares fell 10% as investors digested first-quarter results that included plans to increase spending on artificial intelligence.

It’s on pace to be Meta’s worst day since October 2025 and Alphabet’s best day since November 2025.

The stock price movement shows that Wall Street does not applaud all tech companies’ AI investments.

“Investors are still trying to balance the size of the AI ​​opportunity with the capital needed to chase it, and there has been less uniformity in the market on what their spending plans should be,” Matt Blitzman, an analyst at Hargreaves Lansdown, said in a research note on Thursday. “But more importantly, the cycle has not yet cooled down.”

Alphabet beat analysts’ first-quarter revenue expectations with a 63% year-over-year increase in revenue, supported by strong Google Cloud business. Google CEO Sundar Pichai said cloud growth was driven by demand for the company’s enterprise AI solutions.

The company has raised its outlook for capital spending for this year to $180 billion to $190 billion, from its previous forecast of $175 billion to $185 billion.

Meta beat Wall Street expectations for first-quarter profits and sales, but the company’s Daily Active People (DAP) fell from the previous quarter due to “internet disruption in Iran.”

The company has increased its capital expenditure plans for this year to a range of $125 billion to $145 billion from the previous range of $115 billion to $135 billion, which it said “reflects our expectations for component price increases this year and, to a lesser extent, additional data center costs to support capacity in future years.”

Pichai said on a conference call with investors that Alphabet is seeing “tremendous” demand for its AI tools and custom chips. AI “is shining a light on every part of business,” he added.

Meta executives have sought to justify the company’s massive AI spending, saying it is needed to “meet infrastructure needs” and capture future growth while strengthening its core online advertising business.

Unlike the alphabet microsoft and AmazonBoth have large cloud infrastructure businesses that allow them to turn their AI investments into revenue, but Meta has no such service, making it difficult to prove that it can deliver profits.

Microsoft raised its full-year 2026 capital spending forecast to $190 billion, with $25 billion of that reflecting rising component prices. Amazon maintained its previously announced capital spending budget for this year expected to reach $200 billion, higher than its mega-cap technology peers.

Concerns over Meta’s AI spending led JPMorgan analysts to downgrade the stock from overweight to neutral on Thursday.

Analysts wrote that Meta faces a “tough road” to generating returns from its high capital expenditure forecast, especially as hyperscalers “continue to benefit from deep integration in enterprise technology stacks, silicon supply, and model diversity.”

“Overall, we want to see a clearer path to benefiting from AI spending beyond our core advertising business, and we believe it will take time to build, iterate, scale, and monetize new products and experiences,” JPMorgan analysts said.

–CNBC’s Jennifer Elias and Jonathan Bunyan contributed to this article.