AI Spending Fears Wipe Billions Off Big Tech Valuations in 2026

After years of rapid growth powered by artificial intelligence optimism, several of the world’s largest technology companies are facing sharp market value declines in early 2026. Investors who once rewarded aggressive AI expansion are now scrutinising spending levels, profitability timelines, and rising competition across the sector.

Since the start of the year, major US technology firms have collectively lost hundreds of billions of dollars in market capitalisation. The shift reflects growing concerns that massive investments in AI infrastructure may take longer to deliver meaningful returns.

Microsoft Leads Losses Amid AI Competition Fears

Microsoft has seen one of the biggest declines among tech giants. Its shares are down about 17% year-to-date, erasing roughly $613 billion in market value and bringing its valuation to around $2.98 trillion.

Investor sentiment has weakened amid concerns about increased competition in enterprise AI. New offerings from rival companies, including advanced AI models and workplace automation tools, are intensifying the battle for dominance in the rapidly evolving sector.

Amazon Spending Surge Raises Profitability Questions

Amazon’s shares have dropped approximately 13.85% in 2026, wiping out about $343 billion in market value and reducing its valuation to nearly $2.13 trillion.

The decline follows the company’s announcement that capital expenditure could rise more than 50% this year, largely driven by investments in AI data centres and cloud infrastructure. While the spending aims to strengthen long-term growth, investors are increasingly focused on when these investments will translate into profits.

Other Tech Giants Also See Valuation Declines

Several other major technology companies have also recorded losses:

• Nvidia’s market value has fallen by about $89.67 billion

• Apple has lost roughly $256.44 billion in valuation

• Alphabet has declined by around $87.96 billion

These declines reflect broader concerns about rising costs, intensifying AI competition, and pressure on future profit margins.

Market Mood Shifts From Growth to Returns

For much of the past two years, investors prioritised long-term growth potential tied to artificial intelligence. Now, attention is shifting toward earnings visibility and sustainable returns.

The surge in spending on AI infrastructure, data centres, and computing power is prompting questions about:

• Return on investment timelines

• Competitive pressures in AI tools and platforms

• Profit margin sustainability

• Market saturation risks

As valuations adjust, the tech sector is entering a phase where execution and profitability matter as much as innovation.

Some Global Giants Continue to Gain Value

Despite volatility in US tech stocks, several global corporations have added market value in 2026:

• Taiwan Semiconductor Manufacturing Company (TSMC) gained nearly $293.9 billion

• Samsung Electronics added about $272.9 billion

• Walmart increased its valuation by roughly $179.2 billion

These gains reflect strong demand in semiconductor manufacturing, consumer retail resilience, and diversified business models.

Tech Volatility Continues

Major US indices have shown mixed performance, with technology stocks driving volatility. While easing inflation data has supported broader markets, the Nasdaq has faced pressure due to declines in large technology and communications companies.

Market uncertainty remains centred on how AI investments will reshape profitability and competitive dynamics in the years ahead.

The current correction signals a shift in investor expectations: innovation alone is no longer enough — sustainable earnings and disciplined spending are becoming equally critical.