Tech Company Capital Spending Spikes in First Quarter

During the quarter ending in March, the U.S. tech “superpowers”—Alphabet, Amazon, Microsoft and Facebook, spent $16 billion on capital projects, a figure 68 percent higher than their combined capital spending during the same quarter a year ago, a rate of growth that outpaces that of revenue. This according to a recent Bloomberg article. “In one sense,” the article says, “the booming spending on big-ticket projects defies economic logic. In principle, once companies achieve gigantic scale,… Read More

Trump Tax Savings Channeled to Capex, Not Buybacks

There is now hard data to show that the biggest tax break in three decades is being funneled to capital expenditures rather than share buybacks. This according to a recent article in Bloomberg. “Among the 130 companies in the S&P 500 that have reported results in this earnings season, capital spending increased by 39 percent,” the article reports, “the fastest rate in seven years, data compiled by UBS AG show. Meanwhile, returns to shareholders are… Read More