# Investors revolt against AI spending: Big Tech in trouble AI investments no longer please investors, tech giants lose stock value - **Source:** [Fortune](https://fortune.com) - **Published:** 2026-07-26 - **Topic:** [Finance](https://brifing.si/c/finance) - **Original article:** - **On Brifing:** https://brifing.si/s/0859e8d7-6266-4675-95f0-faa5dffafc33 ## AI investment bubble deflating Years of AI spending spree finally exhausted investors' patience. The selling wave triggered by Alphabet's negative cash flow announcement caused sharp declines in tech giants' stocks. Wall Street no longer operates on 'the more spending the better' logic. ## Fall of the Magnificent Seven The seven big tech leaders of the AI boom lost $797 billion in total value in 2026. Alphabet and Microsoft stocks were particularly hard hit due to excessive spending and uncertain returns. Investors now demand tangible results. ## Semiconductor sector volatility Even semiconductor companies, the main beneficiaries of AI investments, were affected by this wave. The SOX index dropped 17% in July. Serious doubts emerged about whether chipmakers' extraordinary profit margins are sustainable. ## Apple's different strategy Unlike others, Apple avoided major AI investments and became investors' favorite with its partnership strategy. Its stock rose 23% in 2026, becoming the biggest contributor to S&P 500's 8.3% gain. ## Historical valuations obsolete According to Brad Warden of Nomura Asset Management, traditional valuation metrics no longer apply to these companies. Microsoft's 19 P/E ratio may be below its historical average, but it's not considered 'cheap' due to new business model risks. ## AI winter warnings Experts argue an 'AI winter' is inevitable due to excessive spending and uncertain returns. Profit margin compression and valuation corrections are expected to affect the entire market. Tough days ahead for tech giants. ## Sources covering this story - https://fortune.com/2026/07/26/big-tech-earnings-meta-microsoft-apple-amazon-market-revolt-ai-spending/ — --- _Summary written by Brifing from the original reporting. Copyright in the original article belongs to its publisher; read the full piece at the link above._