Google, Microsoft, Meta, Amazon, Apple: Big Tech leadership in US stock market breaking down?
Jefferies said the capex of the four major hyperscalers, namely Microsoft, Amazon, Google and Meta Platforms, is forecast to rise to $620 billion in 2026, up 65 per cent year-on-year from the $376 billion spent in 2025.
- Feb 13, 2026,
- Updated Feb 13, 2026 12:53 PM IST
Jefferies, in its latest GREED & Fear note, said its base case is that the market leadership of Big Tech companies, namely Alphabet (Google), Amazon, Apple, Meta Platforms (Facebook) and Microsoft, in the US stock market is breaking down. The brokerage said the trend of investors starting to question the returns from AI capex has only just begun, warning that there is significant potential for these concerns to intensify in the coming quarters.
"The share of the four major hyperscalers and Nvidia as a percentage of the S&P500’s market capitalisation has so far declined from a record high 27.4 per cent on 3 November 2025 to 24.7 per cent. That percentage can fall a lot further. Yet these five companies still account for an estimated 41 per cent of the gains in the S&P500 since the beginning of 2023 when the AI thematic entered the US stock market," it said.
Jefferies said the capex of the four major hyperscalers, namely Microsoft, Amazon, Google and Meta Platforms, is forecast to rise to $620 billion in 2026, up 65 per cent year-on-year from the $376 billion spent in 2025. These capex forecasts for 2026 are based on the midpoint of the latest company guidance for Amazon, Alphabet and Meta, and consensus estimates for Microsoft, it said. It questioned what this means in terms of these companies’ transition from “asset light” businesses to what could be termed “asset heavy”.
The four major US hyperscalers’ capital spending as a percentage of revenue has risen from 12 per cent in 2023 to a forecast 34 per cent in 2026, while capex as a percentage of operating cash flow has increased from 41 per cent in 2023 to a projected 83 per cent in 2026, based on consensus estimates.
"If the hyperscalers have been mainly spending cash so far, their issuance of debt seems likely to surge with Amazon signaling last Friday in a regulatory filing that it could soon raise debt or equity without giving any specific details," Jefferies said.
Jefferies said that while Google may have successfully avoided potential disruption to Search in the AI era, questions remain over whether AI will be as profitable for Google as Search was.
"GREED & fear doubts that in the extreme since the base case here remains that the AI era will turn out to be the opposite of the winner-takes-all business model of the internet. Still GREED & fear would rather own Alphabet at this juncture than the shares of any of the other hyperscalers," Jefferies said.
Among the companies ramping up spending, the share prices of Microsoft, Amazon and Meta have declined 27 per cent, 21 per cent and 16 per cent from last year’s peak, while Alphabet is down 11 per cent from its February 3 peak. This comes even as the hyperscalers continue to increase their capex.
Alphabet has doubled its capex guidance for 2026 to $175-185 billion, up from $91 billion in 2025, while Meta expects capex to total $115-135 billion in 2026, up from $72 billion in 2025. Amazon also plans to invest $200 billion in capex this year, up from $131 billion in 2025.
Jefferies, in its latest GREED & Fear note, said its base case is that the market leadership of Big Tech companies, namely Alphabet (Google), Amazon, Apple, Meta Platforms (Facebook) and Microsoft, in the US stock market is breaking down. The brokerage said the trend of investors starting to question the returns from AI capex has only just begun, warning that there is significant potential for these concerns to intensify in the coming quarters.
"The share of the four major hyperscalers and Nvidia as a percentage of the S&P500’s market capitalisation has so far declined from a record high 27.4 per cent on 3 November 2025 to 24.7 per cent. That percentage can fall a lot further. Yet these five companies still account for an estimated 41 per cent of the gains in the S&P500 since the beginning of 2023 when the AI thematic entered the US stock market," it said.
Jefferies said the capex of the four major hyperscalers, namely Microsoft, Amazon, Google and Meta Platforms, is forecast to rise to $620 billion in 2026, up 65 per cent year-on-year from the $376 billion spent in 2025. These capex forecasts for 2026 are based on the midpoint of the latest company guidance for Amazon, Alphabet and Meta, and consensus estimates for Microsoft, it said. It questioned what this means in terms of these companies’ transition from “asset light” businesses to what could be termed “asset heavy”.
The four major US hyperscalers’ capital spending as a percentage of revenue has risen from 12 per cent in 2023 to a forecast 34 per cent in 2026, while capex as a percentage of operating cash flow has increased from 41 per cent in 2023 to a projected 83 per cent in 2026, based on consensus estimates.
"If the hyperscalers have been mainly spending cash so far, their issuance of debt seems likely to surge with Amazon signaling last Friday in a regulatory filing that it could soon raise debt or equity without giving any specific details," Jefferies said.
Jefferies said that while Google may have successfully avoided potential disruption to Search in the AI era, questions remain over whether AI will be as profitable for Google as Search was.
"GREED & fear doubts that in the extreme since the base case here remains that the AI era will turn out to be the opposite of the winner-takes-all business model of the internet. Still GREED & fear would rather own Alphabet at this juncture than the shares of any of the other hyperscalers," Jefferies said.
Among the companies ramping up spending, the share prices of Microsoft, Amazon and Meta have declined 27 per cent, 21 per cent and 16 per cent from last year’s peak, while Alphabet is down 11 per cent from its February 3 peak. This comes even as the hyperscalers continue to increase their capex.
Alphabet has doubled its capex guidance for 2026 to $175-185 billion, up from $91 billion in 2025, while Meta expects capex to total $115-135 billion in 2026, up from $72 billion in 2025. Amazon also plans to invest $200 billion in capex this year, up from $131 billion in 2025.