Hunting for AI gains outside Magnificent 7

Corporate America's substantial AI investments have yielded no financial gains outside the Magnificent 7, according to a new Apollo analysis. This revelation has heightened investor concerns about the significant AI spending, particularly as major tech companies such as Alphabet, Microsoft, and Amazon prepare to report earnings.

While these companies are anticipated to deliver strong growth, surpassing estimates alone is no longer enough to reassure a market increasingly focused on AI returns. Investors are displaying a lack of patience for increased capital expenditures, especially in the face of rising interest rates and energy costs. The prevailing sentiment is that companies may soon find themselves converting their data centers into less profitable ventures like pickleball facilities, as highlighted by an investment analyst and echoed in a Bloomberg report.

Brief written by urgent.news from Semafor's own syndicated text. Machine-written — may contain errors; check the original before relying on it.