Michael Burry Highlights Rising AI Spending By Big Tech And Its Impact On S&P 500 — 'The Market Has Voted And The Results Are Clear'

• Alphabet raised its fiscal year 2026 capex forecast to $195 billion to $205 billion last week, raising it from its previous estimate of about $180 billion to $190 billion.
• Tesla CEO Elon Musk told analysts during a post-earnings call that 2026 is a “massive capex year,” while CFO Vaibhav Taneja maintained that Tesla will spend over $25 billion in capex during the year.
• Taneja also added that Tesla’s capex will grow over the next two to three years.

"The Big Short" investor Michael Burry said Wall Street delivered its verdict on Big Tech's artificial intelligence spending, with investors increasingly favoring companies showing stronger returns over larger capital commitments.

“The market has voted and the results are clear,” Burry said in a post on X, highlighting charts compiled by Bloomberg showing Alphabet Inc. (GOOG, GOOGL), Microsoft Corp. (MSFT), Amazon.com Inc. (AMZN), Meta Platforms Inc. (META), Oracle Corp. (ORCL), Micron Technology Inc. (MU) and Tesla Inc. (TSLA) all detracting from the benchmark S&P 500 index's performance since the start of June.

Apple Inc. (AAPL) stood out as the lone major positive contributor to the index amid its comparatively restrained AI spending strategy.

Wall Street’s Fading Appetite For AI Capex

Rising AI capital expenditure forecasts of Big Tech companies have been accompanied by a selloff, as Alphabet and Tesla’s post-earnings drop last week showed.

Shares of Alphabet fell over 7% on Thursday last week after the company raised its fiscal year 2026 capex estimates to about $205 billion, with investors looking past the better-than-expected second quarter (Q2) earnings. Alphabet had previously forecast capex of $180 billion to $190 billion during its first-quarter (Q1) earnings.

Tesla's shares plummeted about 15% on Thursday after the EV giant delivered a mixed quarter. Tesla CEO Elon Musk told analysts during a post-earnings call that 2026 is a “massive capex year,” while CFO Vaibhav Taneja maintained that Tesla will spend over $25 billion in capex during the year. Taneja also added that Tesla’s capex will grow over the next two to three years.

Data compiled by Bloomberg showed that Big Tech companies with the largest forward 12-month capital expenditure estimates have been among the biggest drags on the S&P 500 since the start of June. Meanwhile, Apple, with a relatively modest capex outlay, has been a net contributor to the index during this period.

AAPL Emerges As Top Mag 7 Performer YTD

Shares of Apple have performed the best in 2026 so far, outpacing AI frontrunners like Nvidia, Alphabet, Microsoft, Meta, and Amazon.

Per the Bloomberg report, Meta, Microsoft, Amazon, and Alphabet are cumulatively expected to spend about $724 billion on capex this year and nearly $950 billion in 2027.

Morgan Stanley Remains Bullish On Companies Integrating AI

Morgan Stanley strategist Michael Wilson said in a recent note that the margin expectations are improving most clearly for companies integrating AI capabilities, per another report by Bloomberg.

“The outlook for AI adopters is becoming increasingly compelling. This is especially important because several industries often viewed as vulnerable — including transports, software & services, and professional services — also rank among the more attractive adopter groups,” Wilson and his team stated in the note.

Last week, tech strategist Dan Ives said that the AI capital expenditure boom remains “full steam ahead” after the latest quarterly results from Tesla and Alphabet.

Ives added that while higher AI infrastructure spending may weigh on margins in the near term, accelerating adoption of AI by both enterprises and consumers will be a key theme of Q2 earnings. He added that while this may test investor patience, capex will drive the future.

The S&P 500 ETF (SPY) is up 16% over the past 12 months, while the Invesco QQQ Trust (QQQ) is up 21%.

Also See: MU, SKHY, STX, WDC And Other Memory Stocks Tumble — Evercore's Daryanani Believes Supply-Demand Imbalance Is Going To Get Bigger In 2027

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