AI’s Expanding Footprint
Author: Samuel Miller
CFA®, CFP®, CAIA®
Executive Vice President of Investment Strategy
June 2026
Annual and estimate capital expenditures, selected hyperscalers (AMZN, GOOG, MSFT & ORCL). As of June 30, 2026. Source: FactSet
For most of the past two years, AI as an investment theme meant one thing: a handful of mega-cap technology companies whose capital spending was reshaping global markets. That concentration served early investors well. June offered a reminder that it will not always work that way.
The five major hyperscalers just logged one of their worst months on record as a group, with the basket falling more than 12% from its late May peak. Microsoft alone is on pace for its steepest monthly decline since 2000. The proximate cause is not a slowdown in AI demand. Revenue and earnings at these companies have continued to beat expectations. The market’s concern is narrower and more specific: capital spending has climbed so quickly that it is now consuming nearly all of operating cash flow, leaving little room for the buybacks and dividends that have long supported these stocks. more
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