Big Tech Spending Plans Raise Investor Concerns
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 1h ago
0mins
Should l Buy GOOGL?
Source: CNBC
- Surging Capital Expenditures: Microsoft is projected to increase its capital expenditures to $123 billion by 2026, up from $83 billion last year, indicating strong confidence in future growth but raising concerns about AI profitability.
- Negative Market Reaction: Amazon's stock has fallen about 12% this month, while Microsoft and Alphabet are down over 3% each, and Meta has slid around 5%, reflecting cautious investor sentiment towards high spending plans.
- Increased Debt Financing: Despite having massive cash reserves, these tech giants are tapping debt markets, with Alphabet looking to raise about $15 billion through a high-grade dollar bond sale, and Meta having issued $30 billion in investment-grade debt to fund its data center expansion.
- Historic Spending Project: Canaccord Genuity analysts noted that these companies' capital expenditures could account for approximately 2.1% of U.S. GDP by 2026, marking one of the largest infrastructure projects in U.S. history, although investors must remain vigilant about leverage management.
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Analyst Views on GOOGL
Wall Street analysts forecast GOOGL stock price to rise over the next 12 months. According to Wall Street analysts, the average 1-year price target for GOOGL is 338.25 USD with a low forecast of 279.00 USD and a high forecast of 390.00 USD. However, analyst price targets are subjective and often lag stock prices, so investors should focus on the objective reasons behind analyst rating changes, which better reflect the company's fundamentals.
34 Analyst Rating
27 Buy
7 Hold
0 Sell
Strong Buy
Current: 322.860
Low
279.00
Averages
338.25
High
390.00
Current: 322.860
Low
279.00
Averages
338.25
High
390.00
About GOOGL
Alphabet Inc. is a holding company. The Company's segments include Google Services, Google Cloud, and Other Bets. The Google Services segment includes products and services such as ads, Android, Chrome, devices, Google Maps, Google Play, Search, and YouTube. The Google Cloud segment includes infrastructure and platform services, collaboration tools, and other services for enterprise customers. Its Other Bets segment is engaged in the sale of healthcare-related services and Internet services. Its Google Cloud provides enterprise-ready cloud services, including Google Cloud Platform and Google Workspace. Google Cloud Platform provides access to solutions such as artificial intelligence (AI) offerings, including its AI infrastructure, Vertex AI platform, and Gemini for Google Cloud; cybersecurity, and data and analytics. Google Workspace includes cloud-based communication and collaboration tools for enterprises, such as Calendar, Gmail, Docs, Drive, and Meet.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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