The AI trade has definitely become more fraught. But at least one constant remains: Investors are choosing the companies on the receiving end of big tech's spending spree.
So far, 2026 has been a rough year in general for tech stocks. By Friday's close, the Nasdaq composite logged a 1% loss, compared with a 4% gain for the Dow. Even more telling, the S&P 500 Equal Weight Index is up around 5%, compared with a 1% gain for the standard S&P 500. The equal-weight index essentially nullifies the outsize influence of eight tech giants, whose combined market capitalization takes up more than a third of the S&P 500's total.
The declines have been driven by what can only be described as a schizophrenic mood regarding artificial intelligence. New AI coding tools from companies such as Anthropic have made investors question the future of software companies, while the tech giants that are spending vast sums to enable those tools are also being punished.
The only somewhat safe place is proving to be the chip makers and other companies that benefit directly from the spending spree.
Here is a breakdown of how AI is rippling through tech stocks:
Worries about AI really started picking up late last year. A flurry of megadeals by OpenAI sparked legitimate questions as to how a cash-burning startup can make good on $1.4 trillion of chip and cloud-computing contracts. During the first week of November, OpenAI's Chief Financial Officer Sarah Friar made comments at a Wall Street Journal conference that appeared to suggest the company was looking to the federal government as a backstop.
While the company scrambled quickly to deny that interpretation of her remarks, they were nonetheless taken as another sign of instability at the top of the AI heap. Many major tech stocks fell sharply that week, taking down the Nasdaq, which hit an all-time high the week before. And most haven't recovered. Google's parent, Alphabet, is the only stock among the AI-exposed tech giants to gain ground since the Nasdaq peak.
Investor apprehension about AI hasn't compelled the biggest tech companies to scale back their bets on the technology. Google, Meta Platforms and Amazon.com all used their latest quarterly reports to project major increases in capital spending for the current year. Wall Street is also projecting notable increases from Microsoft and Oracle for that time period. Taken together, those five companies are expected to part with a total of $715 billion this year. That would be a 60% increase from last year.
Investors aren't exactly thrilled. Meta was the only big tech stock to rise following its report, as investors seemed ready to look past the capex surge given the accelerating growth of its core advertising business. Meta's stock has since given up those gains, while Google, Amazon and Microsoft have all fallen since their reports.
Even that damage hasn't been equally spread. The stock of Google's parent has fallen only 3% since its earnings announcement, and is still positive for the year. Strong growth in the company's core business units offset most of the sticker shock of its giant capex forecast.
Microsoft, meanwhile, is down 17% since its report, while Amazon slid 6% on Friday following its results. Both companies are suffering from unfavorable comparisons with Google. It has its own frontier AI models that are directly challenging OpenAI, plus a much bigger balance of net cash to fund its AI pursuits.
AI jitters haven't spared the biggest chip stocks. Nvidia, Broadcom and AMD got a nice lift after Amazon capped big tech's season of significant capital-spending ramp-ups. Nvidia even helped propel the Dow past the 50000 mark on Friday with an 8% gain. But worries about the overall outlook for AI -- and their respective exposures to OpenAI -- have weighed on all three over the past three months. This is despite their rather crucial role in making the chips that are the main brains in AI computing.
The biggest chip beneficiaries of the AI trade lately have been those in the memory business.
DRAM and NAND flash memory play a crucial role in data centers. But there isn't enough available production to satisfy demand from AI systems and still supply the necessary memory for such products as PCs and smartphones.
Memory prices are soaring as a result. Counterpoint Research says prices have jumped 80% to 90% so far in the first quarter. That is bad for any company that has to buy memory for its products. It is great for the makers of memory chips and the equipment companies that supply them.
The flash memory maker Sandisk has nearly tripled in value in the past three months while Micron has surged by 66%. Lam Research, a maker of chip-manufacturing tools that is heavily exposed to the memory space, is up more than 40%.
Meanwhile, questions about AI's ultimate future haven't stopped investors from assuming the worst for software companies. That selling pressure began last year, as the popularity of AI coding tools propelled a belief that big companies will someday use AI to make software for their own internal needs rather than spending hundreds of millions on contracts with companies like Salesforce, Workday and ServiceNow.
There are many problems with that assumption, given the complexity and mission-critical nature of most enterprise-software offerings. Even Nvidia Chief Executive Jensen Huang described the idea of AI killing software "the most illogical thing in the world" at a conference last week.
That didn't stop investors from hitting the sell button again, especially after Anthropic released new tools that included more-powerful coding assistants and functions that can be used for corporate tasks such as product management.
One interesting thing about the latest selling round is how it has looped in software providers previously thought safe from AI disruption. Palantir Technologies has lost more than 23% so far this year after booming 135% last year.
Major cybersecurity providers such as CrowdStrike, Palo Alto Networks and Zscaler are down substantially this year after rallying in 2025. One of the few positive performers has been Zoom, the videoconferencing platform that became a household name during the pandemic but has since struggled to expand its business in a substantial way.
Even that has an AI angle. Zoom is an investor in Anthropic, and an analyst said in a report late last month that the stake could be worth between $2 billion and $4 billion. Zoom's stock jumped more than 11% following that report, which put the shares in positive territory for the year. The company just better hope that Anthropic doesn't have an AI video-calling tool up its sleeve.
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