All posts tagged: CapEx

Tesla just increased its capex to B. Here’s where the money is going.

Tesla just increased its capex to $25B. Here’s where the money is going.

Published by skeptic

Tesla CEO Elon Musk kicked off the company’s first-quarter earnings call with a monetary heads-up — or depending on the mindset of the investor, a warning. Tesla’s capital expenditures will skyrocket to $25 billion in 2026, far outpacing its previous annual spend as it races to stay ahead of the competition and transitions to an AI and robotics company, according to its first-quarter earnings report. That figure, which covers what Tesla plans to spend on physical assets outside of its day-to-day operating expenditures, is three times higher than its annual capex budget in previous years. For comparison, Tesla’s annual capital expenditures were $8.5 billion in 2025, $11.3 billion in 2024, and $8.9 billion in 2023. Tesla had announced in January that it expected capital expenditures to be in excess of $20 billion in 2026, already a substantial increase meant to cover its AI initiatives, including investments in compute infrastructure and data centers, and the expansion and ramp of its manufacturing and R&D production lines, among other items. This $5 billion uptick suggests these initiatives will …

Amazon CEO takes aim at Nvidia, Intel, Starlink, more in annual shareholder letter

Amazon CEO takes aim at Nvidia, Intel, Starlink, more in annual shareholder letter

Published by skeptic

Amazon CEO Andy Jassy’s annual shareholder letter reads something like a Kendrick Lamar diss track, if the rapper was a corporate-speak talking CEO and not a poetic Pulitzer-prize winning musician. Meaning, you have to know the history to understand all of the competitors Jassy takes aim at, alongside cute personal stories about his unrealized dream of being a sportscaster and watching hockey games with his dad. Of course, Jassy doesn’t throw the gauntlet down directly. He takes a more nuanced approach. For instance, in his challenge to Nvidia, he writes, “We have a strong partnership with NVIDIA, will always have customers who choose to run NVIDIA” and will always support these chips in its cloud. But he also says: “Virtually all AI thus far has been done on NVIDIA chips, but a new shift has started.” AWS customers, he says, “want better price-performance” meaning Amazon’s own home-grown Trainium AI chips. Jassy says demand is so high for this chip that capacity for the newest one, Trainium3, is nearly sold out. Remarkably, he says that capacity …

Nvidia has another record quarter amid record capex spends

Nvidia has another record quarter amid record capex spends

Published by skeptic

Chip giant and world’s most valuable company Nvidia reported record profits in its most recent quarter on Wednesday, as demand for AI compute continues to skyrocket. “The demand for tokens in the world has gone completely exponential,” CEO Jensen Huang said on a call with analysts following the results. “I think we’re all seeing that, to the point where even our six-year-old GPUs in the cloud are completely consumed and the pricing is going up.” The company reported $68 billion in revenue in the most recent quarter, up 73% from the prior year, with $62 billion of that revenue coming from the company’s data center business. Notably, Nvidia divided the data center revenue into $51 billion in compute revenue (largely GPUs) and $11 billion in networking products like NVLink. The company reported $215 billion in revenue for the full year. As in previous quarters, the company did not report any revenue from chip exports to China, despite the recent lifting of export restrictions by the U.S. government. “While small amounts of H200 products for China-based …

Amazon and Google are winning the AI capex race — but what’s the prize?

Amazon and Google are winning the AI capex race — but what’s the prize?

Published by skeptic

Sometimes, it can seem like the AI industry is racing to see who can spend the most money on data centers. Whoever builds the most data centers will have the most compute, the thinking goes, and thus be able to build the best AI products, which will guarantee victory in the years to come. There are limits to this way of thinking — traditionally, businesses eventually succeed by making more money and spending less — but it’s proven remarkably persuasive for large tech companies. If that is the game, Amazon does seem to be winning. The company announced in its earnings on Thursday that it projects $200 billion in capital expenditures throughout 2026, across “AI, chips, robotics, and low earth orbit satellites.” That’s up from the $131.8 billion in capex in 2025. It’s tempting to attribute the whole capex budget to AI. But unlike most of its competitors, Amazon has a significant physical plant, some of which is being converted for use by expensive robots, so the non-AI expenses aren’t so easy to wave away. …

Amazon Earnings Preview: All Eyes On CapEx

Amazon Earnings Preview: All Eyes On CapEx

Published by Jenni Sidey

At first, the market was happy to reward big capex forecasts (META); but just a few days later, it changed its mind and decided that the bigger the beat, the bigger the penalty (as was the case with GOOGL today). That leaves Amazon in a precarious place as it prepares to report earnings after the close today: does it project some berserk number or does it risk being conservative? After all, the only thing that will matter is the capex forecast (the earnings will likely be good enough).  Looking at the bigger picture, Bloomberg notes that it’s probably not a great sign that Amazon’s share price is down more than 4% on the day of earnings, before the first headline has even hit. After the hyperscalers Microsoft and Alphabet spooked markets with their huge spending plans — Meta seems to have got away with it — perhaps the best thing Amazon could do would be to announce that it plans only moderate capital expenditure in 2026.  One thing in Amazon’s favor is that analysts aren’t …

Meta Stock Jumps Despite Soaring Capex, Expense Forecast

Meta Stock Jumps Despite Soaring Capex, Expense Forecast

Published by Jenni Sidey

As we wrote in our Mag 7 earnings preview, investor sentiment has soured considerably on META since the Q3 25 print when it became abundantly clear that Zuckerberg’s foot remains firmly pressed down on the OpEx/capex accelerator. To date, investors have seen little tangible evidence that the Meta Superintelligence Lab is capable of producing a leading edge model, and as JPM sais, “we won’t receive clarity on that issue this print. (But we may get some in the March/April timeframe when Avocado might launch.)” Looking at this quarter specifically, investors’ attention will be focused squarely on the 2026 OpEx guide (can’t be bigger than feared) as well the Q1 26 Revenue guide (needs to show a modest FXN acceleration on an easier comp). All told, investor sentiment on META heading into this print was at best ‘timid’, with many looking for the trade-off between massive capex and returns on investment. Going into earnings, Goldman’s desk wrote that investor positioning is 7/10, and notes that the stock has been a relative short amongst Mag7 peers for investors since …

Microsoft Tumbles After Cloud Growth Slows, CapEx Soars

Microsoft Tumbles After Cloud Growth Slows, CapEx Soars

Published by Jenni Sidey

With all eyes firmly focused on CapEx numbers to keep the AI-expansion narrative alive, Microsoft beat expectations on top- and bottom-line, and operating income, but a bigger than expected CapEx. “We are only at the beginning phases of AI diffusion and already Microsoft has built an AI business that is larger than some of our biggest franchises,” said Satya Nadella, chairman and chief executive officer of Microsoft. “We are pushing the frontier across our entire AI stack to drive new value for our customers and partners.” Microsoft posted adjusted earnings of $4.14 a share on revenue of $81.3 billion (better than expected earnings of $3.91 a share and revenue of $80.3 billion), beating across every segment: Intelligent Cloud revenue $32.91 billion, estimate $32.39 billion Azure and other cloud services revenue Ex-FX +38%, estimate +38% Productivity and Business Processes revenue $34.12 billion, estimate $33.45 billion More Personal Computing revenue $14.25 billion, estimate $14.33 billion “Microsoft Cloud revenue crossed $50 billion this quarter, reflecting the strong demand for our portfolio of services,” said Amy Hood, executive vice …