The stock market’s recent rally is stalling out. Crude oil is also pulling back modestly after a big gain yesterday. Gold and silver are up, while the dollar and Treasuries are flattish.
The staggering cost of AI infrastructure is forcing Big Tech to raise huge amounts of money in the equity and debt markets – with Alphabet Inc. (GOOGL) the latest example. The firm is raising $80 billion via a $10 billion deal with Berkshire Hathaway Inc. (BRK.B) and $30 billion in additional stock and preferred stock sales now – plus $40 billion in “at the market” share sales starting in the third quarter.
Alphabet is ramping up sales of its Tensor Processing Units (TPUs), AI chips that compete with Nvidia Corp.’s (NVDA) offerings. It’s also building out AI compute infrastructure. The firm’s chief financial officer Anat Ashkenazi said recently that 2027 capital expenditures would be “significantly” above the $190 billion Alphabet plans to shell out in 2026.
GOOGL, BRK.B, HPE (YTD & Change)
Data by YCharts
Meanwhile, Claude developer Anthropic filed confidential Initial Public Offering paperwork with the Securities and Exchange Commission yesterday. The move allows the SEC to review its filings and request updates, the first step toward a public share sale. It also comes shortly after the company raised $65 billion in a private funding round valuing it at $965 billion. OpenAI is also likely to file IPO paperwork soon.
Finally, tech hardware makers continue to bask in the glow of the AI spending boom. Shares of Hewlett Packard Enterprise Co. (HPE) are soaring after the maker of computer servers and networking equipment trounced earnings and revenue estimates. Sales jumped 40% in the quarter while adjusted earnings per share surged 108%. Already up 96% year-to-date, HPE stock is rising another 25% today.
