META shares decline
META Platforms shares declined following announcements of large AI investments by major tech companies. Amazon plans to spend $200 billion on AI and other projects in 2026, while Alphabet said its capital spending could double. Investors worry these costs could affect profits and put pressure on existing software businesses.
SanJac's official
Andrew Wells, chief investment officer at SanJac Alpha in Houston, said that investors think companies are pulling forward revenue from many years but are now reducing risk because the market does not fully reflect possible problems. He added that AI is still promising, but stock prices may be too high for now.
Software companies
Software and data analytics companies also fell. Canada-based Thomson Reuters dropped 0.7% after a record one-day fall earlier this week. London-listed RELX fell 4.6%, marking its worst week since 2020. The S&P 500 software and services index lost almost 8% this week, cutting about $1 trillion in market value since January 28.
St. James’s Place's official
Carlota Estragues Lopez, equity strategist at St. James’s Place in London, said that investors worry that AI growth may focus only on a few big companies, and this could limit profits for smaller firms. Investors are also watching how traditional software companies adjust to the rise of AI technology.
Investors stay cautious
Stocks rose last year because of AI excitement. Now, investors are more careful. Analysts say investors will watch whether AI spending leads to real profits and if older software companies can stay competitive as technology changes.
