Big Tech Stocks Lose Billions as AI Spending Fears Hit Valuations

Intermediate | February 18, 2026

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Why Big Tech Valuations Are Under Pressure

If you’ve been watching the stock market lately, you might have noticed something uncomfortable: some of the world’s biggest tech companies are suddenly looking… expensive. In plain terms, big tech valuations are getting questioned. Investors aren’t rejecting AI. They’re asking a more annoying question: “Okay, but when does this pay off?”

Reuters reported that the world’s most valuable tech stocks have had sharp declines in market value in 2026, after years of strong gains, because investors are starting to doubt whether massive AI spending will produce returns that match the hype. (Reuters)

Microsoft Takes a Big Hit

One of the biggest names feeling the pressure is Microsoft. Reuters said Microsoft shares were down about 17% year-to-date, and that slide wiped roughly $613 billion off its market value—leaving it valued at about $2.98 trillion (as of the Friday referenced in the report). (Reuters)

According to Reuters, part of the worry is competition: Microsoft faces pressure from Google’s latest Gemini model and Anthropic’s Claude “Cowork” AI agent. Investors are basically wondering whether Microsoft can keep winning the AI race while also protecting profits.

Amazon’s Spending Plans Raise Eyebrows

Amazon hasn’t escaped the market’s mood swing either. Reuters reported Amazon shares were down about 13.85% so far this year, erasing around $343 billion in market value and putting the company at roughly $2.13 trillion. (Reuters)

The report also noted that Amazon said it expects capital spending to jump more than 50% this year. That kind of spending can be smart long-term—especially if it builds stronger AI infrastructure—but in the short term, it can scare investors who want to see clear profits now. (Reuters)

Nvidia, Apple, and Alphabet Also Slide

Even other tech giants saw meaningful drops. Reuters reported that since the start of 2026: (Reuters)

Nvidia’s market value fell by $89.67 billion, to about $4.44 trillion.
Apple’s market value fell by $256.44 billion, to about $3.76 trillion.
Alphabet’s market value fell by $87.96 billion, to about $3.7 trillion.

The big idea here is simple: AI is exciting, but investors are demanding “earnings visibility.” In other words, they want to see a clearer path from AI spending to real profit.

Not Everyone Is Losing: The “Picks and Shovels” Winners

Interestingly, Reuters also pointed out that some companies gained market value during the same period—suggesting investors may be rotating into different types of “safer” winners.

Reuters said these companies added market value in 2026: (Reuters)

TSMC: +$293.89 billion, valued around $1.58 trillion
Samsung Electronics: +$272.88 billion, valued around $817 billion
Walmart: +$179.17 billion, valued around $1.07 trillion

So even while Big Tech gets questioned, companies that supply chips (or sell everyday essentials) can look more attractive.

Bigger Picture: AI Is So Expensive, Companies May Borrow More

On February 18, 2026, Reuters also reported that UBS raised its forecast for U.S. tech investment-grade bond sales in 2026 to $360 billion (up from $300 billion). UBS pointed to rising spending by big tech firms and noted that megacaps like Meta, Amazon, and Alphabet announced big increases to their capital expenditure plans during earnings season. (Reuters)

UBS even estimated hyperscaler capex could approach $770 billion in 2026, about 23% higher than UBS’s previous expectations—meaning big tech may tap debt markets more to fund AI data centers. (Reuters)

Vocabulary

Valuation (noun) – the estimated value of a company in the market.
Example: “When valuation gets too high, investors start to question the price.”
Capital spending (noun) – money a company spends on big long-term assets (like data centers).
Example: “Amazon’s capital spending plan made some investors nervous.”
Return (noun) – profit or benefit earned from an investment.
Example: “Investors want to see a return on massive AI spending.”
Wipe off (phrasal verb) – to remove a large amount, usually money or value.
Example: “The selloff wiped billions off tech company market values.”
Competition (noun) – rivals fighting for the same customers or market.
Example: “Competition in AI is getting more intense every quarter.”
Earnings visibility (noun phrase) – how clearly investors can predict future profits.
Example: “The market is demanding better earnings visibility, not just big promises.”
Lofty (adjective) – very high; often too high.
Example: “Some investors think tech’s lofty expectations are hard to meet.”
Investor sentiment (noun) – the general mood of investors.
Example: “Investor sentiment shifted from excitement to caution.”
Hyperscaler (noun) – a very large cloud/tech company that runs huge data centers.
Example: “Hyperscalers are spending heavily to build AI infrastructure.”
Issue debt (verb phrase) – to borrow money by selling bonds.
Example: “Some companies may issue debt to fund new AI projects.”

Discussion Questions (About the Article)

Why are investors questioning big tech valuations in 2026?
What numbers stood out to you the most (Microsoft, Amazon, or someone else)? Why?
How does heavy AI spending create both opportunity and risk?
Why might investors prefer companies like TSMC or Walmart during uncertainty?
What does “earnings visibility” mean in your own words?

Discussion Questions (About the Topic)

Do you think AI spending will pay off for big tech? Why or why not?
In business, when is it smart to invest heavily, even if profits drop short-term?
How can a company prove that a new technology strategy is working?
If you were an investor, what information would you want before buying a tech stock?
What are the risks of borrowing money (issuing debt) to fund growth?

Related Idiom

“Put your money where your mouth is” – prove you really mean what you say by taking action (or showing results).

Example: “Investors are basically telling tech companies: ‘Great AI promises—now put your money where your mouth is and show the profits.’”

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