My experience as a former CEO is that CapEx budgets start the year high with management’s best intentions to spend them, but then rarely get fully spent. As a former sell side analyst, I’ve observed that most companies don’t spend their full CapEx budgets. Among the big 4 hyper scalers ( $Alphabet - C(GOOG.US) $Microsoft(MSFT.US) $Meta Platforms(META.US) $Amazon(AMZN.US)) all except AMZN spent less in 1Q CapEx than WS expectations, and 1Q actuals were far lower than 1/4 of their current FY2026 CapEx budgets.
While I appreciate we’re in the early stages of an AI arms race, I also understand CEO and CFO human nature is to budget conservatively (and then beat), and convince their boards they are doing all they can do invest competitively in the AI arms race. As we get into 2H, I fully expect boards to revisit the ROIs on actual AI investments, and scale back if returns are below the companies’ cost of capital.The copyright of this article belongs to the original author/organization.
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