AI stocks slide as investors question soaring data center spending

Artificial-intelligence stocks fell Tuesday as investors confronted the size of the money behind the boom: Alphabet, Amazon, Meta Platforms and Microsoft plan to spend up to $720 billion this year, mostly on AI data centers. The weakness was led by the companies supplying that buildout, including Nvidia, Micron Technology, Broadcom and Lam Research, after Amazon and Alphabet had already dropped about 5% on Monday.

The slide was more than a one-day reset. Critics have been warning about a possible AI investment bubble, and the latest selloff followed another bout of weakness on June 10, when AI stocks helped drag the U.S. market sharply lower. That earlier drop, and the renewed pressure on Tuesday, suggested investors were no longer treating every new data-center commitment as a reason to buy.

The central question is not whether AI matters. It is whether the spending will translate into enough profit growth, revenue growth and operating efficiency to justify the capital outlay. A June analysis cited by financial media put the four hyperscalers’ 2026 capital-expenditure guidance at about $725 billion, roughly 77% above about $410 billion in 2025. Much of that increase is headed into GPUs, custom silicon, data centers and power infrastructure, a scale of investment that is already forcing the market to reprice the trade.

That shift matters because the biggest AI names have spent months selling investors on a long runway of productivity gains and new business lines. For now, the market is demanding a faster payoff. The selloff showed how quickly sentiment can turn when spending keeps climbing faster than earnings can catch up, and it left AI stocks facing a harder test: whether the growth story still justifies the price.