Five Magnificent Seven members report earnings this week; capex spending will signal AI investment direction

Four hyperscalers—Microsoft, Amazon, Meta Platforms, and Alphabet—announced plans in January to invest upward of $630 billion to fuel AI ambitions, with projected combined spending of $670 billion this year based on their latest forecasts.

Capex spending figures from these four companies' earnings reports will be watched closely, as much of this investment goes toward acquiring high-performance chips from Nvidia and others; recent indications from chipmakers show few signs of a pullback in investment this quarter.

Meta and Microsoft have been looking to lean out their teams while pursuing this capital-intensive investment; Big Tech is now tapping debt markets to fund AI spending after years of generating substantial free cash.