AI Spending Surge Drains Tech Stocks; SaaS Slumps as Market Reassesses AI Deployment (META, MSFT, GOOGL, AMZN)

Tech stocks face renewed pressure as hyperscalers report record AI infrastructure spending, pushing the S&P 500 tech sector down to a 10% discount versus the broader market. Alphabet and Meta anticipate doubling capital spending on AI this year; Amazon forecast 2026 CAPEX of $200B, up 50% YoY and $50B above expectations; Microsoft guidance consistent with a 60% quarter-over-quarter rise in CAPEX. The sell-off intensified earlier this month as software-as-a-service shares tumbled, with the S&P Software & Services Index off 20% year-to-date amid concerns over AI-driven “vibe coding” and new legal-AI tools from Anthropic. While some analysts downplay the “SaaSpocalypse,” the pullback reflects a broader reassessment of AI deployment economics and potential industry displacement. The market reassessment is seen as healthy, with tech margins under pressure from CAPEX but suppliers like memory makers受益, exemplified by Sandisk (SNDK) rising ~150% this year. Investor focus is shifting from AI promise to its economic impact and winners among AI-driven growth.