Here comes the AI capex shocker, Goldman Sachs says
Capital expenditure (capex) numbers from major technology companies continue to rise as the industry accelerates its AI infrastructure development. Goldman Sachs expects this trend to persist for the next several years, with supply and demand for AI components still significantly out of balance, according to Eric Sheridan, business unit leader of the TMT Group at Goldman Sachs Research.
Memory prices have increased as the supply chain remains constrained, leading to higher input costs for AI-related products and services. During the second quarter earnings season, Alphabet's capex totaled $44.9 billion, surpassing expectations, and the company raised its full-year guidance to $195 billion to $205 billion. Other tech giants, such as Tesla and SpaceX, also announced substantial capex commitments for 2026 and beyond, primarily focused on AI and robotics.
The full impact of this aggressive spending on AI is yet to be seen, as investors grapple with whether the elevated capex figures have already been factored into the stock prices of these companies. Goldman Sachs' Sheridan believes the focus will shift from the sheer dollar value of capex to the return on investment, potentially driving further multiple expansions in the market.
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