Tech sell‑off over AI costs
Markets are pulling back on tech stocks as investors fret about unsustainable AI spending and unclear ROI — a wave that’s forcing analysts to reprice risk across the sector. That volatility changes the baseline assumptions you’d use in case interviews and valuation models for AI‑heavy companies. (indexbox.io)
FactSet and market trackers show combined declines topping roughly $1.3–1.35 trillion in tech market capitalization during the early‑2026 sell‑off, with algorithmic flows amplifying weekly volatility. (aicerts.ai) Amazon was the single largest contributor to the rout, leading Big Tech losses in early February as investors reacted to upgraded capex and AI spending projections. (cnbc.com) Multiple sell‑side shops moved from Buy to Neutral on hyperscalers this quarter: Rothschild/Redburn downgraded both Amazon and Microsoft over Gen‑AI economics, and Stifel cut Microsoft to Hold while trimming its price target. (investorsobserver.com) Street research and company disclosures put cumulative Big Tech AI/data‑center capex in the high hundreds of billions: consensus reporting cited roughly $325 billion in 2025 for Meta/Microsoft/Amazon/Alphabet, while Alphabet reported about $91.4 billion of capex for the year with a $27.9 billion Q4 run‑rate. (finance.yahoo.com) Sector‑level repricing has been acute in enterprise software: analysts and market newsletters coined a “SaaSpocalypse” after estimates that roughly $2 trillion of B2B software market value was re‑rated amid AI disruption fears. (financialcontent.com) Public SaaS valuation data shows wide dispersion after the correction—median EV/Revenue peaked near 18.6x in 2021 and multiples collapsed by more than 60% during the 2022–23 unwind, while select categories such as Analytics & Data Management posted a +11% median EV/TTM revenue move into 2025. (windsordrake.com)
