Nasdaq poised to lead recovery after tech-led selloff

• Alphabet announced a $175-$185 billion 2026 capex plan, nearly double last year's spending, while Amazon's $200 billion AI infrastructure budget exceeded forecasts by $50 billion despite 14% sales growth to $213 billion and 26% AWS growth
• Investors are increasingly skeptical about 'hyperscaler' tech companies' massive AI spending plans, fearing wasted capital with uncertain returns as the AI bubble concerns resurface
• The tech selloff triggered broader market impacts with crypto in 'freefall' and precious metals weakening, as analysts describe it as 'a week from hell for tech stocks'

Market Summary: Nasdaq Poised for Recovery After Tech Selloff

Market Overview:

US stock futures pointed higher Friday morning, with Nasdaq futures up 0.6%, S&P 500 futures up 0.5%, and Dow Jones futures gaining 0.4%. This follows Thursday's selloff where the Nasdaq fell 1.6% amid tech sector concerns and labor market weakness.

Key Company Developments:

Alphabet: Announced aggressive 2026 capex plans of $175-185 billion, nearly double the previous year's spending. YouTube revenue disappointed despite 13.5% ad growth, though Google Cloud surged 48%.

Amazon: Shares plummeted over 10% after hours despite posting strong fundamentals—sales up 14% to $213 billion and AWS revenue rising 26%. The stock decline was triggered by a $200 billion capex plan for 2026, exceeding forecasts by $50 billion.

Market Implications:

Investor anxiety is mounting over massive AI infrastructure spending by tech hyperscalers without clear evidence of returns. Neil Wilson of Saxo Markets characterized the situation as "the classic emperor's new clothes," while AJ Bell's Russ Mould noted this has been "a week from hell for tech stocks."

The massive capex announcements have sparked fears of an AI bubble, with investors questioning whether tech giants are overinvesting. The concern centers on these companies' confidence in AI transformation versus the uncertainty around actual demand and returns on investment.

Broader Market Impact:

Cryptocurrency markets are experiencing significant declines, and precious metals are softening. The tech sector volatility has prompted investors to reduce exposure to hyperscaler stocks amid growing skepticism about AI spending levels.