Google (GOOG.O) shares fell more than 7% after the company raised its capital
expenditure forecast for this year from $190 billion to $195–205 billion. Google
is the first of the major tech firms to report quarterly results; Meta,
Microsoft and Amazon are due next week. The four companies had in April
disclosed plans to invest up to $725 billion cumulatively in AI; Google's capex
increase could push that total higher by the end of next week. Returns on those
investments remain unclear. Thomas Montero, a senior analyst at an investment
firm, said Google's larger-scale spending plan "is not reassuring," adding that
rising interest rates and persistent supply-demand tightness in AI
infrastructure may be eroding the appeal of financing such spending from cash
flow.
