AI spending boom surges for big tech but returns stay elusive Jefferies warns profitability risk

Published on 2 May 2026

Capex is climbing faster than cash flows right now

Global tech giants are pouring money into AI, pushing capital expenditure to near record levels compared with operating cash flow. But monetisation is still unclear, leaving investors worried about profitability as competition heats up. Jefferies’ Chris Wood says the AI race could become capital intensive, similar to industries where heavy spending doesn’t guarantee early returns.

AI capex is near record levels versus operating cash flow
Monetisation timelines remain uncertain, raising profit concerns
Analysts warn AI may become capital intensive like other industries
Early financial strain signals could worsen as competition grows

#profitability #big tech #markets #ai spending #capital expenditure

Read the full story at The Economic Times

This summarization was done by Beige for a story published on The Economic Times

AI spending boom surges for big tech but returns stay elusive Jefferies warns profitability risk

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