By Brian Sozzi

Big Tech will have to do a lot of convincing this coming earnings season that aggressive capital expenditures to build AI infrastructure will deliver strong returns.

It may be hard to alleviate investor concerns given how eye-popping the spending looks.

As three new charts from Barclays strategist Venu Krishna detail (see charts below), capex among hyperscalers (tech companies spending a lot to scale up AI infrastructure) is expected to surge 87.9% year over year. Krishna hinted that the hyperscalers are likely to continue to be bullish on how much they plan to spend for the balance of 2026 too.

Krishna estimated that hyperscaler capex won't peak until 2028 and that it will reach $1 trillion, "followed by only a modest normalization thereafter." He added that investors may be "under-appreciating" the magnitude of the AI capex spending peak by $300 billion.

The AI capex ramp is steep. Barclays

So much spending!. Barclays

Watch the spending ratios. Barclays

If there is any upshot here for nervous investors, it's that the stock prices of Big Tech may reflect a good bit of the spending worries.

The "Magnificent Seven" stocks are hovering around fresh lows relative to the S&P 500 (^GSPC), JPMorgan strategist Mislav Matejka pointed out in a new note this week.

"Mag 7 relative [to S&P 500] is not acting as a safe haven," Matejka said.

The Magnificent Seven is a group of seven cash-rich, large-cap technology stocks that have collectively dominated the US stock market and driven the majority of the S&P 500's gains since 2023. It includes Nvidia (NVDA), Amazon (AMZN), Tesla (TSLA), Microsoft (MSFT), Google (GOOG), Apple (AAPL), and Meta (META).

The Magnificent Seven companies are aiming to spend around $680 billion on AI-related capital expenditures in 2026 — a 70% increase from 2025. The fact that a lot of these companies are raising debt to fund AI build-outs has only added to the concerns about profit potential this year.

Brian Sozzi is Yahoo Finance's Executive Editor and a member of Yahoo Finance's editorial leadership team. Follow Sozzi on X @BrianSozzi, Instagram, and LinkedIn. Tips on stories? Email brian.sozzi@yahoofinance.com.