Big Tech Is Spending Hundreds Of Billions On AI Infrastructure — IO Fund's Beth Kindig Says It's Time To Show The Payoff

• One of the biggest surprises of this year's AI rally, according to Kindig, is that the shares of companies driving the AI buildout have largely lagged those of the companies supplying the underlying infrastructure.
• Alphabet has led the group with an 11% gain this year, followed by Amazon at 8%, while shares of Meta Platforms are down 2% and Microsoft shares have declined 18%.
• She said investors will look beyond revenue and earnings per share to cloud growth, AI software adoption and advertising trends as evidence that AI investments are paying off.

Big Tech earnings next week could offer Wall Street its clearest look yet at whether hundreds of billions of dollars in AI infrastructure spending are starting to pay off, according to I/O Fund’s Lead Tech Analyst Beth Kindig.

She said investors want proof that AI monetization is finally catching up with years of heavy AI investment.

“Big Tech has spent considerable capex for AI infrastructure, and the Street will want to see this spend turning into revenue and profits,” Kindig added, highlighting that the upcoming earnings reports could provide that answer.

AI Suppliers Have Outpaced Big Tech In 2026

One of the biggest surprises of this year's AI rally, according to Kindig, is that the shares of the companies driving the AI buildout have largely lagged the stocks of those supplying the underlying infrastructure.

Alphabet Inc. (GOOG, GOOGL) has led the group with an 11% gain this year, followed by Amazon.com Inc. (AMZN) at 8%. Shares of Meta Platforms Inc. (META) are down 2%, while Microsoft Corp. (MSFT) shares have declined 18%.

“What is most shocking is how much Big Tech has lagged in dollar terms,” Kindig said. Investors will be watching whether Big Tech can turn AI spending into faster cloud growth, stronger advertising revenue and broader AI software adoption.

Kindig Highlights What Wall Street Has On Its Radar

Investors will look beyond revenue and earnings per share to cloud growth, AI software adoption and advertising trends as evidence that AI investments are paying off, according to the analyst.

Kindig said that at Alphabet, the focus is on whether Google Cloud can sustain its momentum while Search continues to monetize AI through advertising and growing inference demand.

The analyst added that Microsoft faces pressure to reignite Azure growth despite its rapidly expanding AI business, while investors will also be watching for updates on its Maia AI chips.

At Meta and Amazon, investors will be watching whether AI investments continue driving advertising growth at Meta and cloud growth at AWS, Kindig said.

Why This Earnings Season Matters For The AI Trade

Strong AI-driven growth across cloud, software and advertising could broaden the AI rally beyond chipmakers and infrastructure suppliers by showing that years of heavy investment are beginning to generate sustainable returns, Kindig said.

JPMorgan’s Global Market Strategist, Hugh Gimber, said during an interview on Friday that the recent sell-off in chip stocks is not a reflection of weakening fundamentals, noting that semiconductor companies continue to deliver strong results.

"For me, I think what's key here is not so much what the semis names are telling you themselves, but rather what we're going to get from the hyperscalers over the next couple of weeks, because all of that earnings growth is because of hyperscaler capex," he said.

Alphabet, Microsoft, Meta, Amazon, Apple, Intel, and other major technology companies are set to report quarterly earnings over the next two weeks.

The tech-heavy Nasdaq Composite index was down nearly 1% at the time of writing.

The Invesco QQQ Trust (QQQ) is up 25% over the past 12 months, while the iShares U.S. Technology ETF (IYW) is up 35%.

Also See: Why Is SG Stock Soaring Today?

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