How Heavy AI Spending Is Paying Off for Amazon and Meta

Tens of billions in capital expenditures, coupled with pessimistic coverage around them, have fueled investor anxiety around Meta, Amazon, Alphabet, Microsoft, and other tech giants. But Evercore analyst Mark Mahaney argues several internet companies are already demonstrating that their investments are paying off.

Meta: AI-Driven Revenue Growth, Early Signs of Return

When Meta reported earnings in late July, the stock dropped 8% the next day as investors worried about escalating capex. But the numbers told a different story:

• 2026 capex guidance raised only 1.9% to $137.5 billion — the market had braced for much worse, and the actual figure came in below those fears
• AI driving results: Q2 revenue grew 28% year-over-year to $60.8 billion, powered by higher ad prices and increased ad impressions
• Future capex growth decelerating: analysts expect annualized growth of just 22% in the two years after 2026 — a significant slowdown that should boost margins

CEO Mark Zuckerberg told investors on the earnings call: "We are receiving significant premiums for compute capacity and have more developer-facing coding and productivity tools planned." Meaning Meta can monetize its AI infrastructure directly if needed.

WhatsApp remains in early stages of monetizing through AI assistants, with paid services and subscription revenue driving a 73% year-over-year surge in "Other Business" revenue.

Mahaney estimates Meta trading at approximately 17x forward P/E — near the low end of its range since the AI era began in 2023, and well below the S&P 500's 20x+.

Amazon: AWS Growth Reaccelerates, Inflection Point Reached

Amazon raised its 2026 capex guidance 10% to $220 billion, but CEO Andy Jassy stressed the increase was primarily driven by memory chip costs — hardware prices fluctuate significantly, and actual data center expansion didn't materially exceed expectations.

Key metrics:

• AWS growth reaccelerated from 17% in Q2 last year to 37% this quarter
• Excluding the one-time gain from the Anthropic investment, Amazon's earnings per share still beat estimates thanks to better-than-expected revenue and margins

Mahaney sees Amazon at a "fundamental inflection point."

Shopify and Airbnb: Attractive AI Return Prospects

• Shopify's gross merchandise volume (GMV) grew 32% year-over-year to $115.6 billion, improving free cash flow margins with essentially flat capex
• Airbnb maintained strong growth with attractive AI return prospects

Conclusion: Waiting Too Long Means Missing the Window

The debate over when massive AI investments will pay off won't be settled anytime soon. But Mahaney's verdict: "Quality internet growth stocks are entering a recovery phase, in part due to very strong AI Return on AI Investment (ROAI) in Q2 earnings and successful product cycles."

By the time certainty arrives, the opportunity may already have closed.