Big tech big spend but big returns growing scepticism

A new analysis of the so-called ‘‘Magnificent Seven’’ tech giants reveals that although companies continue to invest heavily in artificial-intelligence and cloud infrastructure, investor scrutiny of return on investment is intensifying. The report notes that some firms’ earnings have not kept pace with their expanding cost base, prompting concerns about margin pressure despite strong revenue growth. Strategists say that moving forward, execution discipline and capital-allocation efficiency will become as important as innovation itself in justifying high valuations.