“I am absolutely convinced of the power of compute,” AMD (AMD<\/a>) chair and CEO Lisa Su told me.\u00a0“When I say I think AI compute equates to intelligence, why wouldn’t you want more intelligence? Of course you want more intelligence.” <\/p>\n Su added, “Now, the important thing is where is the return on investment for those investments? We are seeing the return on investments. I mean, the fact is, we are ramping our own AI usage within AMD very significantly month over month. And we’re seeing the productivity come back in just better products, more capable products, faster time to market. And that will come out as you look at the long arc [of technology].” <\/p>\n I had a similar conversation with Mastercard (MA<\/a>) CEO Michael Miebach this week. Miebach is increasingly tapping into AI to build up fraud-prevention capabilities. He is also leaning into agentic commerce. It’s not a pipe dream \u2014 it’s an actual thing that is starting to happen on the platform.\u00a0 <\/p>\n Then there is the case of IBM (IBM<\/a>). The company has had a terrible month, no doubt, amid a disastrous earnings warning. But the reason behind the earnings letdown is capital allocation to AI, not less AI.\u00a0 <\/p>\n “What’s new is right now \u2026 companies, given the AI investments that they are going to make, which I think ultimately will get monetized and valued, \u2026 are building out the infrastructure portfolio to support that future of the AI realization,” IBM CFO Jim Kavanaugh told Yahoo Finance<\/a>.\u00a0 <\/p>\n Yet here we are, watching prominent tech stocks getting obliterated.\u00a0 <\/p>\n Alphabet’s second quarter capital expenditures<\/a> came in at $44.9 billion, slightly above Wall Street forecasts of $44.7 billion. Full-year capex guidance<\/a> was raised to $195 billion to $205 billion from $180 billion to $190 billion, with a “significant” increase seen for 2027, executives said on the earnings call.\u00a0 <\/p>\n Alphabet stock took a hit on Thursday to the tune of a 7.13% decline, erasing about $293 billion in market value.\u00a0 <\/p>\n I encourage you to read the earnings call again \u2014 it’s very apparent that AI is being monetized at Alphabet, and increasingly so. <\/p>\n Tesla (TSLA<\/a>) said it will commit $25 billion in capital expenditures<\/a> for 2026, roughly three times what the company has historically spent. A significant increase is also expected in 2027 as Elon Musk ramps up Optimus and robotaxi production<\/a>.\u00a0 <\/p>\n Tesla stock plunged 14.5% on Thursday.\u00a0 <\/p>\n Are these sell-offs truly warranted? Executives get paid handsomely to make bets on the future. Those bets are being made today on AI. And in so many cases, bets made 18 months ago on AI are paying off today. <\/p>\n So when investors rush to the exits because of increased capital expenditures, do they think they know better about the future of tech than Elon Musk and Lisa Su? I sure don’t. <\/p>\n Give these companies a little cover to deliver. I suspect 24 months from now, we will be singing from a different hymn sheet. <\/p>\n Brian Sozzi<\/a> is Yahoo Finance’s Executive Editor, host of the Power Players with Brian Sozzi<\/a> podcast, and a member of Yahoo Finance’s editorial leadership team. Follow Sozzi on X @BrianSozzi<\/a>, Instagram<\/a>, and LinkedIn<\/a>. Tips on stories? Email brian.sozzi@yahoofinance.com. <\/p>\n Click here for in-depth analysis of the latest stock market news and events moving stock prices<\/a> <\/p>\n Read the latest financial and business news from Yahoo Finance<\/a> <\/p>\n