Investing.com — Meta last week said that recent capital raises by peers such as Alphabet and SpaceX, and expected fundraising by Anthropic and OpenAI, have created an “increasingly challenging fundraising environment,” raising questions over whether enough capital exists to fund AI spending plans.
In results announced Wednesday, Meta reported revenue rose 26% from a year earlier to $64.6 billion, but free cash flow was -$2.1 billion.
It raised the low end of its 2026 capital spending forecast to a range of $135 billion to $145 billion and announced a new class of non-voting shares to make future capital raising easier.
Other executives voiced similar worries. Broadcom CEO Hock Tan warned capital could become the biggest constraint on AI development. BlackRock CEO Larry Fink said competition for capital was the fiercest he had witnessed in his career. Nvidia CEO Jensen Huang said neocloud demand is “off the charts” but capital is scarce.
AI-linked stocks led the selloff. Nvidia fell 4.4%, CoreWeave 10.1% and Lam Research 11.8%, while the iShares Semiconductor ETF (SOXX) dropped 6.8%. The Nasdaq fell 2.6%, its worst day in four months.
Money moved to other parts of the market rather than out of stocks altogether, Yardeni Research said.
The S&P 500 with every company weighted equally edged up 0.7%, while the version weighted by company size fell 1.2%. The Dow edged up 0.02% and the Russell 2000 gained 0.11%.
Treasury yields fell across maturities. The 2-year yield dropped to 4.64%, and the 10-year yield fell below 5% for the first time in nearly a month.
Yardeni said the rally suggests market participants are increasingly concerned that tighter access to capital could slow the AI buildout.
Yardeni nonetheless expects the biggest players to keep access to financing, and called market-driven tightening healthy for the AI boom because it should mean money is used more efficiently and the risk of overspending falls.
Amazon, Alphabet, Meta, Microsoft and Oracle are projected to spend almost $780 billion in 2026 and more than $1 trillion a year from 2027 through 2030. Yardeni said their strong cash flows, balance sheets and market access should let them keep investing in AI.
Original Article
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