Charu Chanana, Chief Investment Strategist at Saxo, published an analysis on October 30th stating that the latest round of tech company earnings reports shows that demand for AI infrastructure is still accelerating, but the cost of meeting that demand is also rising. Microsoft Azure, Google Cloud, and Amazon AWS saw revenue growth of 48%, 103%, and 39%, respectively. Amazon projects capital expenditures of approximately $220 billion by 2026, while Microsoft, Google, and Meta are also continuously expanding their data center investments. Meanwhile, the commercial benefits of AI remain uneven: Meta improves advertising performance through AI, Microsoft monetizes through cloud services and enterprise software, but some companies are still bearing high infrastructure and R&D costs. TSMC's gross margin reached 66.4%, and SK Hynix's operating profit margin reached 80%, reflecting high profitability due to tight supply, but new capacity may gradually increase competition and price pressure. Saxo believes that the key to the next phase of the AI investment cycle lies in whether companies can translate infrastructure investments into sustained profits and productivity gains. Currently, AI has shown commercial success in advertising, cloud computing, and enterprise software, but broader economic productivity gains still lack strong evidence.
