Here comes the AI capex shocker, Goldman Sachs says

Here comes the AI capex shocker, Goldman Sachs says

Brian Sozzi · Executive Editor

Mon, August 31, 2026 at 8:10 PM GMT+3 3 min read

Eye-popping capital expenditure numbers on earnings days of Big Tech players like Alphabet (GOOG, GOOGL), Meta (META), and Amazon (AMZN) are far from over as the industry races to build AI infrastructure.

In fact, investors should just come to expect them for the next several years.

"We actually don't think supply and demand on AI finds a balance until the first half of 2028. So we're going to have quite a long way here of this supply-demand imbalance. That means more capex, more revenue growth, and the supply chain remains under a lot of constraint," Goldman Sachs co-head of TMT research Eric Sheridan said on Yahoo Finance's Opening Bid (video above, or listen below). "Memory pricing is going up when the food chain is as constrained as it is. Pricing on chips are higher today than they were six and 12 months ago. So all the input costs are higher. You also have a bit of a demand to acquire land and build out shells on the data center side, even just the empty shells to get ahead of the dynamic of wanting to be there when the components are there in two, three, four years' time."

The second quarter earnings season gave investors a taste of what's to come.

Alphabet's second quarter capital expenditures came in at $44.9 billion, slightly above Wall Street forecasts of $44.7 billion.

Full-year capex guidance was raised to $195 billion to $205 billion from $180 billion to $190 billion, with a "significant" increase seen for 2027, executives said on the earnings call.

Tesla (TSLA) said it will commit $25 billion in capital expenditures for 2026, roughly three times what the company has historically spent.

A significant increase is also expected in 2027 as Elon Musk ramps up Optimus and robotaxi production.

Total capital expenditures for SpaceX (SPCX) in the second quarter were $18.4 billion, well above analyst estimates of around $6 billion.

Commentary by executives on the earnings call indicated that third and fourth quarter capital expenditures could each remain at similar levels as in the second quarter, implying full-year capex of about $65 billion. Wall Street was modeling for $50 billion in capital expenditures for SpaceX this year.

JPMorgan warned this month that SpaceX could allocate $200 billion to AI spending in each of the next two years.

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The gazillion-dollar question is whether this aggressive spending on AI has been priced into the stock prices of Big Tech companies. Many — such as Tesla — saw their stock price hammered this past earnings season on spending concerns.

The verdict is out on this front, Goldman's Sheridan said.

"I think we're shifting from capex dollars, good or bad, to visibility into return on the capex dollars," he added. "So I think if you go back through earnings season, two nights in a row, Microsoft (MSFT) and Amazon did a very effective job of laying out how to think about the return on invested capital. We think as that theme continues to dominate in investor conversations, the theme against the absolute dollars and the visibility into returns will go up. And that will lead to more multiple expansion."

Brian Sozzi is Yahoo Finance's Executive Editor, host of the Power Players with Brian Sozzi podcast, and a member of Yahoo Finance's editorial leadership team. Follow Sozzi on X @BrianSozzi, Instagram, and LinkedIn. Tips on stories? Email brian.sozzi@yahoofinance.com.

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